Meridian was built behind the Nevada Power Co. right-of-way for electrical lines that parallels Flamingo Road – hence the ginormous transformer that you saw. The 678-unit complex was constructed as part of Hughes Center. Extended-stay housing for visiting businessmen was subleased through Los Angeles-based Oakwood Corporate Housing.
In 2005, Meridian was sold to American Invsco and converted to condominiums, a conversion process financed by Corus Bank West (remember that name) to the tune of $111 million. During the ensuing makeover, marble- and travertine-tile floors were laid – without county permits – that would result in a June 10 finding that Meridian is suffering from 21%-35% structural overload. Clark County has ordered the tiling removed. But we’re getting ahead of ourselves …
By February 2007, the purchase was looking like a good investment: Units bought by American Invsco for slightly under $200,000 apiece were reselling at an average of $522,776. A concierge service, TimeWise, was retained to cater to residents’ needs.
However, since early 2006 luxury-condominium developers had been experiencing difficulty getting financed, a forewarning of the implosion of Las Vegas’ condo bubble. Marketing Solutions Executive Vice President Steve Bottfeld wanted to hear none of it, telling the Las Vegas Review-Journal in early ‘06, "I don’t care what Freddie Mac says. I don’t care what Fannie Mae says. We think prices will go up [8%] to 12%. Existing home prices are going to rise a little more slowly."
By February of 2008, Meridian’s business plan had changed again. It announced an alliance with Warwick International Hotels whereby the complex would be baptized "Meridian Luxury Suites," with penthouse units going for $500/night or more. That same month, BankUnited announced that Meridian was on a blacklist of condo developments for which it would no longer write mortgages. Further trouble lay straight ahead.
In May, Meridian’s plumbing contractor was accused of a "Mickey Mouse job" that left the complex vulnerable to fire. No sooner had the corner-cutting been fixed than a small conflagration did erupt, but damage was thankfully slight. At the same time, Clark County officials discovered Meridian had begun renting units as hotel rooms before actually getting all the bureaucratic i’s dotted and t’s crossed, never mind having a "transient lodging" license.
This raised the vexing question of whether Meridian had been collecting room taxes and passing them along to the county – especially since the overnight-rental practice dated back to mid-2007. An audit turned up $586,000 in unpaid taxes (Meridian eventually settled the matter for $589,000).
As Meridian began receiving misdemeanor citations, it hired local political fixer Sig Rogich to try and make the trouble go away. Meanwhile, condo owners who’d been leasing their units back to Meridian for use hotel as rooms saw that cash spigot turned off. Some depositors sued Meridian for "fraud, conspiracy and wrongful taking of furniture and funds," in a lawsuit that gradually accumulated at least 200 plaintiffs. At present, it is wallowing in federal District Court, not even having begun its discovery phase. The state Contractors’ Board, meanwhile, is looking into accusations of unauthorized construction work. The Clark County District County has already given Meridian a free pass on building-code violations.
The complex’s Flamingo Road driveway, rented from an Illinois real estate investor, was cut off in April 2009 because Meridian was $22,000 behind on its license. Condo values, meanwhile, had fallen through the floor, with units reselling for as little as $100,000.
Things went from bad to worse on Sept. 9, 2009, when the Comptroller of Currency seized Corus Bank. With money sunk into 15 Vegas-area condo developments, Corus was hit especially hard by the collapse of the Southern Nevada real estate market.
At present, the FDIC is sitting on Meridian and other Corus assets, holding out in hope of a market turnaround rather than risk getting bargain-basement offers. A representative of Meridian informs LVA that the complex is only renting units for 30-day stays or longer and its hotel business no longer exists.
