Is this any place to build a resort?
The Chemehuevi Indian Tribe Reservation in San Bernardino County is a vast field of parched, brown earth where temperatures can reach 120 degrees in the summer. To the southwest is the impressive desert landscape of the Whipple Mountains, a fine place to observe raptorial birds and wind-carved canyons, perhaps, but not a major tourist draw. The tribe's land fronts onto the incongruously blue waters of Lake Havasu, created out of the Colorado River in 1934 by the Parker Dam, which provides water for Los Angeles and San Diego. Across the lake, on the Arizona side, stands … London Bridge? Yes, that London Bridge, the one you sang about as a child, which was famously sold to an Arizona investor, taken apart and reassembled in splendid absurdity in Lake Havasu City.
Now that all that is clear, let's discuss the resort.
With the assistance of some notable developers and designers, including the master mind of The Walt Disney Company's planned communities, a 32-square-mile stretch of the western lakeshore would become a green environment of drought-resistant landscaping, centering on a large-scale casino-hotel, a separate conference center and a spa with tennis courts, flanked by - what else? - an 18-hole golf course. A large marina containing hundreds of boat slips would attract visitors to the western shore of Lake Havasu, about 25 minutes of boating time from the eastern side of the lake. A sort of hybrid of Las Vegas and Palm Springs, the Chemehuevi resort would appeal to people who wish to gamble, as well as those who would rather spend their time on water sports, golf, tennis and horseback riding along tree-shaded trails with a view of the mountains.
In keeping with the environmental theme, visitors would park their cars and switch to electric vehicles. These vehicles, in turn, would allow the developer to build narrower roads and use less asphalt. To preserve the visibility of desert starlight in the evenings, landscape designer Ron Izumita said the lighting at the resort would not be allowed to “leak” into the night sky.
The revenues from this plush resort would float northward, so to speak, to finance the second phase and ultimate raison d'etre of this plan: a master-planned community for the Chemehuevis themselves. This community would consist of several thousand single-family homes, presumably along with schools, clinics, churches and retail stores.
While all this is very ambitious, it is far from impossible. Consider the following: Lake Havasu, described in promotional brochures as “the most popular water destination in Arizona,” is already an established resort area with a devoted following. Developer Bob Small, the former Disney and Marriott executive who is the developer of the resort, said he was finally sold on the idea when he saw the lake full of boaters and restaurants full of people, despite the baking heat of late summer. The lake is full of watercraft much of the year, and the existing marina on the eastern shore is running out of boat slips. Consider also that the Chemehuevi tribe controls all the land proposed for development, and has entitlements to 11,000 acre-feet of water annually, or enough, at least in theory, to support both the resort and the residential community. The consulting firm Economic Research Associates (ERA) has concluded that the project “pencils out.”
And, as a federally recognized Indian tribe, the Chemehuevis technically form a sovereign nation. They are not required to go through the typical local entitlement process. (Insofar as the project is on Lake Havasu, however, the tribe needs to win permit approval from multiple agencies, including the Army Corps of Engineers and the U.S. Fish & Wildlife Service.)
An attractive resort may hold some appeal to affluent visitors, especially when the best hotel in Lake Havasu City is a Ramada Inn. What is interesting is that the resort and the residential community for the tribe are very separate, even though the casino-hotel and surrounding businesses are likely to provide most, if not all, the jobs for local residents.
The possibilities of site planning, however tantalizing for this empty canvas, soon give way to the hard realities of real estate finance. Funding for economic studies and preliminary design has been available from the San Manuel Band of Mission Indians, a San Bernardino-based tribe that has already made money from a casino and provided some seed capital to the neighboring tribe. To obtain the hundreds of millions of dollars that the Chemehuevi project would require, however, the project must surmount two unusual issues, according to Small.
As in many Indian territories, the Chemehuevi Reservation is not considered private property, and the area has not been subdivided for development. This raises problems with the sale of housing units. One possible solution would be the sale or long-term lease of land to a third party, perhaps a private, not-for-profit corporation. Investors who wanted to buy condominiums or lakefront houses could buy them on a co-op basis.
Another issue is that the tribe's status as a sovereign nation may make investors wary that their money and ownership stakes would not have the usual legal guarantees that are enforceable in state and federal courts. That is a more difficult problem. One conceivable solution would be a contract that guaranteed the right of investors to adjudicate their issues in court. Then again, how would such a contract be enforceable outside the statutory limits of the United States?
Small, a 65-year-old man in semi-retirement with apparently limitless optimism, seems unworried. The Chemehuevi resort, however ambitious, makes sense to him as a viable resort site, as social equity and as environmentally sensitive design. The Chemehuevi Reservation may well be a good place for a resort after all - if the tribe and its advisors can find a way to make money grow on the barren shores of Lake Havasu.
