Company proposing Red Rock development files for bankruptcy, seeks to continue pursuing project
A company that has long-sought to redevelop a gypsum mine and build homes near Red Rock Canyon National Conservation Area filed for bankruptcy in July, according to court records. It is the latest development in an ongoing — and often politically heated — dispute over Gypsum Resources LLC’s plan to develop a master-planned community near the conservation area.
The company, owned by developer Jim Rhodes, operates a gypsum mine on Blue Diamond Hill next to Red Rock. The land is currently zoned for rural housing, but Gypsum Resources has long pushed the county to increase the density so it could covert the mine and nearby land into a master-planned community for residential and commercial use. Climbers, hikers and environmental groups have pushed back on the proposal, turning it into a political issue during the 2018 gubernatorial race, as well as in a Clark County commission race.
In a court filing last week, Gypsum Resources said it will continue pursuing the development.
The mine is operated under a subsidiary, Gypsum Resources Materials LLC. According to a declaration Rhodes filed as part of the Chapter 11 proceedings, he predicted the company could “return to positive net income” in the third or fourth quarter of this year. He cited demand for gypsum and sales with a compound annual growth rate of 9.8 percent from 2015 to 2018.
The bankruptcy came after a period of growth between 2015 and 2017. But the company ended 2018 at a net loss, which the filing attributes to a transaction involving mining rights and issues scaling operations of a trucking company it merged with. Rare snow, precipitation and a breakdown of the mine’s crusher interrupted the gypsum operations at the start of 2019, the filing said. It also said the company's interest expense and debt servicing had spiked in 2018.
Rhodes’ declaration said that his company intends to move forward with the master-planned community and a lawsuit against Clark County. That litigation claims the county commissioners acted unfairly and violated previous legal agreements over how to process its zoning request.
In a section describing the company’s outlook, Rhodes wrote that Gypsum Resources is using a firm to restructure its mining operations, challenge the contested mining rights transaction and continue to push its litigation with Clark County, seeking damages of more than $1 billion.
“The land is more valuable as a residential community than an operating mine,” the filing reads. “[Gypsum Resources] acquired the property with the intent to develop a master-planned community due to the property’s unparalleled views. [Gypsum Resources] seeks to build over 5,000 houses on the development as well as commercial and recreational spaces for all walks of life and income levels.”
A lawyer representing Gypsum Resources was not available by press time for further comment.