We're bullish on Las Vegas. 60 ,000 people a
year move here. 22 ,000 households are created
every year, and about 13 ,000 homes are built,
including multifamily. So we'll be OK as developers.
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something great together. Welcome back to Trust
the Process, podcast where we talk about new
homes, the real estate industry, the market,
and everything in between. Had a little bit of
a different look today. Still have Michael joining
me. Our resident expert with all of the good
information. And we've gone to kind of a more
remote platform. Couple of reasons we've done
this. First, because it's not always convenient
to get together. But secondly, we're thinking
it will be a good way to introduce guests as
we go. Other speakers that we bring in or other
experts in other fields that we'd like to start
including into the information in the podcast
we share with you. So this is kind of our trial
run. Though we have... We have a great topic
to follow up on. Previously we spoke about the
project that we're working on and some of the
obstacles that we faced with permitting and making
sure that it works well. And I can go ahead and
I'll link that first one in the body of the content
here and then you guys can go back. If you didn't
catch the first half, this is the follow up.
So update us on the latest if you will, Michael.
Well, we had a thanks for the intro and I always
love being called a resident expert. I'm taking
that any day of the week. I know it's my favorite.
Resident could also mean that I'm inpatient and
inpatient psych ward. So this last week we had
our rubber stamp city council meeting where they.
essentially approved this subdivision that we've
been working on for about seven months and That
represented several meetings that represented
two neighborhood meetings that represented When
I say that that represents meaning that represented
the culmination of multiple neighborhood meetings
multiple meetings of my engineer I meet with
the engineering team every other week and we've
been doing that since about January February
So that's a lot of for midway through the year.
So that's about 13 That's about, yeah, about
seven or eight meetings at this point. No, more
than that. Yeah, probably 15 meetings at this
point. And then you meet with them because you
meet with them and then you meet with us to download
the team on the latest updates. So you spend
a lot of time. Each meeting is an hour and then
I spend an hour talking with the team and I spend
an hour thinking about it for the next week.
Maybe they gave me something to chew on and we'll
kind of talk about that when I pull the map over
and we can show the audience what was technically
fully approved. It's satisfying. It's a very
satisfying win that we got through all of these
hurdles. When the parcel came to me, it was zoned
for public use. It was privately owned, but zoned
for public use. So think something like a church.
Think about something like maybe a rec center.
And it was wedged between two residential housing
developments, and it was only two acres. So it's
not some massive site. It was right way between
two residential housing projects. And then on
the other side of the street was more residential.
It didn't have the infrastructure for walking.
It didn't have any other draws. There was not
really a ton of density in the area that would
justify it being some sort of public use. So
the owners of the parcel came to me in a joint
venture and said, if you can get this switched
over and pulled out of that public use master
plan. So the city has a master plan. not a master
plan community in the sense that we think of
them but the city itself has a master plan where
they have every parcel zoned accordingly to what
their vision for the city is and what they feel
the citizen vision of the city is right because
they're all elected officials for the most part
so or at least the tone is set by the elected
officials so it's a big hurdle the reason i go
into that detail is it's a really really really
big hurdle to get something pulled out of the
master plan so we had to make a really compelling
argument i .e. This is why we need to do it.
What do you need from us to let us do it? And
essentially, we started with wanting to do a
23 -home townhome community. We had a map for
that. We didn't have enough common space per
the city requirements, so we nixed the townhome
zoning. The city was okay with that density.
They actually want the density. They just weren't,
we weren't able to get a waiver of all the other
standards that they make every other developer
do. So I thought that was pretty fair. to say,
if you could get that density in, great, but
I don't think you're going to be able to without
bending a lot of the other rules and we're not
prepared to bend those rules for you because
it's going to start a cascade and then every
other major builder is going to come to us and
say, why don't you make us do park spaces and
roundabouts and things like this to get the townhome
density? And we'd say, oh, I don't know. Why
would we let Trostone Builders do it? They're
a convincing man, but I'll marry that company.
Very compelling. So essentially, we drew several
maps up and that was our first phase was just
getting in front of the staff advises the Planning
Commission. Planning Commission are appointed
or elected and then obviously City Council is
fully elected. So we start with the staff and
they kind of usher you through it and say okay
we're going to be okay with it we're going to
do a staff recommend. If you can get those two
golden words that is you're halfway there. If
you can get those words staff recommends on any
of your staff reports or kind of any of your
documentation you're going to have hope. far
greater odds of getting it through neighborhood
meetings, getting it through planning commission,
and then obviously whatever planning commission
and staff says, city council pretty much rubber
stamps, you would, and that's what was last week,
last Tuesday. So that being said, we knew going
into last week that we were going to be fine
because we had satisfied all those things. So
I didn't even go to that city council meeting.
I left the engineering firm that we hired to
do the tentative map and they advised us legally
on some of the certain processes to get through
those maps getting recorded. So I let them kind
of handle it through and through and I just got
an email the next day. City Council had no problem
with it. I noticed the final action was issued
which essentially means get this map recorded
once you get your civil plans done and that becomes
six parcels a right away and some common spaces.
So we're generating, I think, nine unique new
parcel numbers, and then a public right -of -way.
That will be the opposite to call it a sack.
So it's quite a feat. It's pretty rewarding to
think that we took a hillside, which was an eyesore
and a blight on the community for years, and
odd zoning. It was just kind of this hangover
of an old master plan that they never changed,
right? And the residents didn't want it to be
public use. The residents wanted it to be residential.
around them the lower impact use right in fact
when we went to we you have to send up postcards
to a thousand foot radius i want to say roughly
a quarter mile all the rooftops in a quarter
mile radius with a postcard that says this is
what we're planning on doing and this is the
density we're going for and all that yeah so
we send that over we had to reserve a spot at
the community rec center to have this meeting
and about eight people showed up from the newer
neighborhood that were more luxury homes to the
west of my parcel, the immediate western boundary.
And there really wasn't any major pushback. It
was mostly they were upset about the process
this was going to take. And I told them to trust
the process. And they called them. They were
worried about the dust. They were worried about
the bugs. They were worried about typical, you
know, if you ever watch Parks and Recreation,
the types of people that show up to the city
council meetings. I don't want a new park here
because it's going to generate dust and noise
and kids playing basketball and all this stuff.
So you'd rather have a ditch there. You know,
the residents don't think that way. They just
they know what they have. They don't want it
to change. So I get it. We had already had staff
approval or sorry, recommended staff approval
by that point. So I really wasn't even worried
then. I would have been worried, let's say, if
I were going from residential to public space.
because I'm fucking the trends of the entire
street and I'm not being cohesive to what the
neighborhood already has. So I think that being
said, I didn't have a lot of angst. It was frustrating
to get there though. So originally I had a 23
-home plot or scheme worked up for town homes
that was nixed. By the way, every time you do
that, it's two weeks. So you apply, you send
in your map. You say we'd like to get this waiver,
we'd like to get this, and then they essentially
have a week to review it. So you send it in,
the deadline hits, let's say it's a Tuesday,
you send it in by Friday, they have a full week
to review it, and then they have three days to
get it back to you. So it's not quite two weeks,
but usually you're not going to wait until the
11th hour to submit it. So you're going to submit
it Monday and get it back the following Friday.
So you lose a lot of time. And then if you're
beholden to your engineering team, thankfully
I have phenomenal engineering team. Jeff Thompson
at Taney engineering in Las Vegas is just second
to none and it's why this project happened in
six months and not 12 months or 18 months because
they're just he and his assistant are on the
ball and the whole firm is on the ball and I
think that's why yeah pretty phenomenal team.
So they also got on zoom calls with the city
of Henderson with us I mean they were there with
us and this wasn't a commercial for them but
I just couldn't have done it without them and
it was owner I mean, it was, like I said, it
was several months of, okay, now the city wants
to get on its own call with public works and
with traffic. And I'm sitting here going, there's
15 to 16 city executives over a six home, well,
at that time it was eight, over an eight home
subdivision. And my engineering team is there
as three of us. I think you were on that call
at one point. So two people from Trust, three
people from Taney Engineering, 15 people from
the city of Henderson, all in a team's call.
In fact, the Henderson people were in a boardroom,
remember, and then we were just on a screen watching
them with our faces up there. Yeah. Okay, this
seems like a lot of pomp and circumstance for
an eight -home subdivision, but you had that
traffic pipe in and fire pipe in and sewer pipe
in and public works pipe in and ecology pipe
in and zoning and planning commitments. All these
things had to pipe in on it. So I definitely
understand. Yeah, it was wild. So that being
said, I did want to kind of, you know, one of
the benefits of doing this on this format would
be that we could kind of show the screen and
kind of get an idea of what I was up against.
So I did want to go ahead and show the audience
that. So I'm going to share my screen. Alright,
so here's the site and I believe we've shared
this in the past and I've certainly shared it
on social media if anyone follows me there. This
is Horizon Ridge. And then this was the parcel
right here. This is a mountain. So we didn't
disturb the mountain. We kept the mountain intact.
But we also lost the square footage, right? So
when we deal with the city, everything's about
minimum lot sizes and minimum common area spaces.
I'm sorry. We have two unique common area spaces
and then six parcels. So we're going to have
a total of eight. And then this will be annexed
into the right of way. So here's our cul -de
-sac. We're in RS6 zoning, so minimum of 6 ,000
square foot home sites. So that was also the
tricky part. So the smallest one has to be at
least 6 ,000. So you can see we're kind of squished
on this one because it's longer, but then this
one's wider. So it's more than 6 ,000, but then
you have minimum width that you want in order
to build a product that's marketable. And then
you didn't want this one to be too crazy. So
it ended up just being a lot, right? It ended
up just being a lot of work. to go back and forth
considering we had about 15 to 20 different versions
of this map and then we would submit something
and they would say actually we want this landscape
buffer to be here for sure this whole thing here
is landscaping even though these are town homes
and you're going to a lower intensity technically
the books say you don't need it but they wanted
it because again we're taking it out of their
master plan so they could pretty much tell us
whatever they want right okay if you do it we
want this landscape buffer here well then we
lost 10 feet of lot frontage here okay we don't
want you to mess with this mountain otherwise
you're gonna have to get a hillside overlay okay
well you can see right here that's 21 000 square
feet that's a quarter at the half of an acre
of hillside that i lost i had just had to basically
forfeit then they wanted this landscape buffer
which we understood even though we weren't going
from uh we weren't going to a higher intensity
we were keeping the same intensity as the neighbors
They wanted it on both sides. And then we lost
20 feet total here. We lost all the square footage
of this common element here. And then to add
a little cherry on top, normally cul -de -sac.
Check out this cul -de -sac, Chris. Look how
small and modest that cul -de -sac is, right?
That's 87 feet, roughly. This is 100 feet from
end to end. So then it just cut this whole thing
up. So we lost another... roughly seven feet
this way and We kind of moved the street back
this way to have seven feet. So we were we were
too short and then the the road the little knuckles
here was 43 they wanted 47 so we lost more square
footage on lot six from lot five You can see
where we started at Originally 23. Okay, then
we'll go single -family. Okay, I can do 10 and
I'll do 10 RS eight zoning, which is 4 ,000 square
foot home sites. And I was off by 150 square
feet on one of the lots, which was the whole
reason why we could not go to eight. We had to
go to six. So it was pretty wild when you think
back and forth of what was going on and what
the conversations were. But this is the scheme
we ended up with. You've drawn the homes, right?
You've drawn the homes to fit those envelopes.
And you've got all the utilities laid out. So
when they take a home away or when a home site
doesn't work out, now you have to go back to
the drawing board. You have to redraw the house.
You have to relay it out. All the utilities have
to come in at a different port. I mean, it's
a big deal. It's a big deal. And it's heart wrenching
because you think you've got a home. Start over.
Yeah. Start over. Yeah. So it's okay. I have
no, no regrets. It's going to end up being a
great project. It's going to be probably our,
uh, like maybe a 2027 delivery. So we're going
to be delivering that with some other early 27,
hopefully early 27, uh, 27. There'll be kind
of the tail end of our Westridge subdivision
and we'll probably be long gone out of serene.
So we'll be kind of the way it worked. It just
worked really, really well. Um, From a timing
perspective, I'm excited about the product. Would
I have loved to get eight in? Yeah, but they
would have been smaller homes, smaller home sites.
I would have been limited on my exit prices.
I would have been limited on what I can do. And
ultimately we have to remember that we're luxury
home builders. As much as I would love to get
into more of the middle market, ultimately we
are luxury builders and this is going to be a
luxury product. This is our wheelhouse and I
find it. kind of comforting in that, that I know
how to do the, I can deliver a luxury home and
I know how to make a luxury home profitable.
I know how to make a luxury market, I'm sorry,
luxury project marketable and profitable. And
the area can carry it. And the area can carry
it. If you look at a one mile radius, you hit
20 million dollar homes. You hit one million
dollar homes within a thousand foot radius. I
mean, literally the parcel next door to us is
routinely in a million. It's not uncommon to
get an over $1 million sales price in there.
So I'm very encouraged. I would have loved to
experiment and to take what we do as trust home
builders into a more middle market product. And
it didn't work out that way. Part of why there's
a housing shortage are all these regulations.
Honestly, we literally saw it happen. Some of
those regulations were just things that the regulators
wanted. They're not even in the books. They're
not even technically a regulation. But a regulator
told me that they wanted it. And because I don't
want to die on that hill, the fire is like, no,
we don't need a 100 foot cul -de -sac. Traffic
didn't want it. They didn't care. It was a sewer
truck that might need to get up there in 10 years.
And he might have to back into one of the driveways
to get out of there one time in 10 years. Maybe
never. Or back out of the cul -de -sac and back
onto Horizon Ridge. But no, the entire cul -de
-sac, till the end of time, is going to be bigger
now because of that one regulator. Is that a
standardized code? No. There's not a single cul
-de -sac that big in Las Vegas, in the metro
area. This is going to be 13 feet bigger. It's
pretty wild. But because of that, we lost...
I mean, like I said, it's hard to bellyache when
everything worked out, but it's still, you know,
still kind of... Frustrating, but it's okay.
Everything worked out. It's gonna be a great
product. I'm very excited about it. I know the
whole team's excited about it. The map, I haven't
noticed the final action. My next step is to
design the product that goes there. I didn't
spend a ton of time. I drew about probably 10
different houses over the course of the last
seven months for that neighborhood thinking,
okay, if we end up with this, let me just get
excited about it. So I'm pretty close. I'll probably
find one of those, three of those 10. that will
work in there. And it'll be really exciting.
The product is going to be great. It's going
to have a 2027 delivery. So ideally, maybe the
market comps are even better by then. So I probably
will end up being very happy with the way everything
played out, I would imagine. So we'll put the
best product that we can on there and do the
best we can do to make it a successful project.
So overall, very excited about it. Still 23 townhomes.
That's not in my wheelhouse. I mean I can do
it, but I would have been a little nervous Do
I what do do amenities start to matter more at
that point do people want pools eight? Kind of
yard spaces are they probably not looking for
zero, but maybe they don't want you know a Massive
yard or so and then HOA There's just a lot there
was a lot of things, but I wanted to do it just
to get out of our comfort zone It pushed me right
back to my comfort zone, which is okay Wow It's
going to be a great project. It's interesting
to watch it in real time unfold where you think
you have one and then you have the meeting and
then everything has to change and then you get
it redrafted and you think you have it and then
you go to the meeting. So it's just interesting
every time the municipalities get involved, we
were pivoting to fit into the criteria or the
expectations that they've set forth. Yes, exactly.
and it's part of what makes it exciting though.
I mean honestly and it's part of why the little
parcels like this are still left for companies
like ours because they're not easy to develop.
Infill projects are not easy at all. Not to say
that larger big master plans don't have their
own set of their own basket of issues but it's
not easy and then you don't get the capital behind
them that the big projects get. They're not sexy
to wall street. You can't lump it up as a syndicated
investment as easily as you could say let's say
a hundred whole subdivision in some of them you
know that's easy to erase those funds and it's
easy to pull the fire so this would be a challenge
I mean this is what our business is it's a challenge
to to get them you know to get city to see your
your way just get the buyers to see your vision
to get the company on board to get capital behind
you all these things are challenging, but it's
why there's not 101 companies in town that do
what we do. So I'm grateful that it's challenging
and we're ready for these challenges. We've had
these challenges forever, so this is nothing
new for us. But it'll be interesting. We definitely
earned our grid on this one. We've never pulled
something out of existing zoning and done it
to this extent before. So we're about, I would
say we're about 30 % through. the next 30 % would
be all the land development, the physical work,
and then the last 40 % of the houses. So that's
the funny anecdote to think that as a developer,
when you see homes come out of the ground, the
developer is already about 65 % there. And it's
right. It's true. The buyer coming in is the
last 1 % of the equation. So when they're coming
in and saying, this house isn't going to be done.
nothing's been done. The place board's still
missing lights. There were no utilities here
about six months ago. You would have been camping.
So I think a lot's been done. We're third quarter.
Yeah, we're third quarter of 2025 today. And
you just said this will be a turnover in 2027.
So before you get there, stuff. We've talked
about that numerous times. example to really
point out how far in advance decisions are made
prior to the home actually standing. Yes and
what was set in stone long before a market shifted
or long before and you know we had any data on
what that year would even look like. I don't
even know where rates of interest rates are going
to be in 2017. I have no idea. Your guess is
as good as mine. A year ago I would have thought
we were in the low sixes. High five. Yeah. Didn't
happen. Either way We're bullish on Las Vegas.
60 ,000 people a year move here. 22 ,000 households
are created every year, and about 13 ,000 homes
are built, including multifamily. So we'll be
OK as developers. It's just challenging. Yeah,
it's not always kittens and rainbows. There's
a lot of challenge and a lot of obstacles that
we face to just kind of pull back the curtain.
be plain about that. This is not what we expected,
and obviously we have come to a place where we're
excited about it and we know it's going to be
great, but the pivot has happened again and again
and again throughout Israel, so fair to share
it. Thank you for being transparent, for sharing
it. And let us know how you guys... about this
forum. I'll be anxious to hear your feedback
or to see what you guys think. Does this work
as well for you or or how could we improve on
it? We work with so many great people. So many
behind the scenes like he was just talking about
the engineer. We've got so many people that we
can invite in to discuss other opportunity topics
with. So hoping this becomes a forum we can do
that in. I love it. Thanks again for joining
us on another episode of Trust the Process podcast
and we will see you next time. Thanks. Bye bye.
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