Transcript of interview with Lawrence Canarelli by Claytee White, May 1, 2016

i AN INTERVIEW WITH LARRY CANARELLI An Oral History Conducted by Claytee D. White The Building Las Vegas Oral History Project Oral History Research Center at UNLV University Libraries University of Nevada Las Vegas ii ©The Building Las Vegas Oral History Project University of Nevada Las Vegas, 2016 Produced by: The Oral History Research Center at UNLV University Libraries Director: Claytee D. White Editor: Teresa Arredondo-O’Malley, Stefani Evans Transcribers: Kristin Hicks, Frances Smith Interviewers: Stefani Evans, Claytee D. White Project Manager: Stefani Evans iii The recorded interview and transcript have been made possible through the generosity of the UNLV University Libraries. The Oral History Research Center enables students and staff to work together with community members to generate this selection of first-person narratives. The participants in this project thank the university for the support given that allowed an idea and the opportunity to flourish. The transcript received minimal editing that includes the elimination of fragments, false starts, and repetitions in order to enhance the reader’s understanding of the material. All measures have been taken to preserve the style and language of the narrator. In several cases photographic sources accompany the individual interviews. The following interview is part of a series of interviews conducted under the auspices of the Building Las Vegas Oral History Project. Claytee D. White Director, Oral History Research Center University Libraries University Nevada, Las Vegas iv PREFACE “At five years old, I was the youngest boy at the orphanage. This was the first time that I had lived with indoor plumbing and indoor showers.” To describe award-winning home builder Larry Canarelli as a self-made man is to grossly understate his accomplishments and his determination. Canarelli, founder of American West, Nevada’s largest privately owned development company, learned all about living without shelter as a very young boy. When he was nine years old, Canarelli, the second of his mother’s six children, encouraged his veteran stepfather to buy the family’s first permanent house for $80 down and an agreement to assume payments on the Veterans Administration loan. As his school peers dreamt of large, shiny cars, Canarelli envisaged big, beautiful houses. After self-funding his education, graduating from the University of California Los Angeles, completing two years of U.S. Army service, and earning his Master’s degree from University of Southern California, v Canarelli began his career working with a large home building firm in the Los Angeles area. Three years later he switched firms, and the new company sent him to Las Vegas. In this interview, Canarelli reaches back to his childhood to explain his motivation to build houses: “All of my life, I had an interest in housing. Perhaps this is because of never having a house when I was younger.” He recalls how the Collins Brothers helped him when he founded American West. He describes the Southern Nevada “shelter market” of the 1970s and follows its evolution in style and marketing through the 1980s and 1990s; he talks about master planning and the builders who first master planned their Clark County developments: Pardee Homes in Spring Valley, American Nevada in Green Valley, and Howard Hughes Corporation in Summerlin. He speaks to the influences of interest rates and available land on housing prices; the importance of environmentally responsible housing; where the entry-level housing market will go, and ways that technology has changed home building and home buying. And throughout, he exemplifies his devotion to, knowledge of, and respect for Southern Nevada’s housing industry—its builders, its market, and its buyers. vi TABLE OF CONTENTS Interview with Larry Canarelli May 1, 2016 in Las Vegas, Nevada Conducted by Claytee D. White Preface…………………………………………………………………………………………..iv Speaks of his childhood of poverty in Oregon and Central California, where he was the second of six children and the only boy; recalls finding the family’s first permanent home at nine years old by showing his stepfather an ad for a house he could buy for $80 down and assuming the VA loan payments. Remembers how the Madera Library librarian encouraged him scholastically and he was able to save enough through his jobs to enable him to pay his own way through UCLA; after graduation and two years Army service, he entered USC graduate school, where he earned a Master’s degree in finance and entrepreneurial studies in 1973. Discusses his first job in the Los Angeles area with American Continental Homes and three years later going to Metropolitan Development Corporation, which sent him to study housing markets in Las Vegas and Phoenix; describes becoming the Las Vegas cheerleader and making Metropolitan the largest Southern Nevada builder 1979–1983. Names Joe Blasco and Spanish Trail, also names Signature Homes, Pardee Homes, Lewis Homes..………………………………………………………………. 1-11 Describes how setbacks for homebuilding industry in early 1980s did not dissuade him from leaving Metropolitan in 1984 and starting his own company, American West, which by 1986 had become the largest builder in Nevada. Talks of Mart and Al Collins backing him to start American West, investing in land with him, selling their company to him in 1991, and working with him to develop The Lakes at West Sahara. Describes master planning in Las Vegas; tells why The Lakes succeeded where Lake Las Vegas did not; speaks to maturation of home building industry from shelter market in 1970s to offering more professional marketing and architectural styles from California to Las Vegas; describes bringing architect Malcolm Compton to Las Vegas to design solely for American West. Mentions Mark Fine, American Nevada, and Green Valley; Summerlin, MacDonald Ranch, Wildhorse Golf Course (formerly Showboat Golf Course), and Legacy Golf Course; Pardee Homes, Lewis Homes, and Metropolitan Development; and local pioneer home-building families Becker and Chism………………………………………………………….11-20 Discusses process of selecting home, lot, and options, mortgage, and move in; talks about redevelopment and preservation in larger and older cities and how difficulties of finding large parcels of developable land lead to unsustainable rise in costs for entry-level housing; explains life cycles of houses and neighborhoods; talks of outlying cities (Pahrump, Mesquite) and leased land near Paiute reservation as reasonably priced options for entry-level housing as demand for scarce Las Vegas land increases. Talks of how Greenspuns in Green Valley and Pardee in Spring Valley were first Southern Nevada large landowners with vision who could develop with continuity; they in turn set the stage for Howard Hughes and Summerlin, who had the land, the vision, and the money to carry master planning forward…………………………………………………….20-33 vii Recounts ways technology has streamlined how home buyers select options, which are instantly communicated to construction managers in the field, who can electronically individualize each house and perform inspections for automatic inventory, billing, payouts, and banking; also ties technological advances to increased ability to mitigate water and energy consumption in the desert even as population increases. Describes the evolution of single-family housing in Las Vegas from one story to two- and three-story models, and why that happened. Recalls honors awarded to himself and to American West from his building industry peers and by the Clark County School District with the opening of the Lawrence and Heidi Canarelli Middle School. Names Richard Plaster with Signature Homes; Robert Lewis with Lewis Investment, and land developer and entrepreneur Don Andress………….………..……………………………………………….33-47 viii 1 This is Claytee White. It is May first, 2016. I am at American West Homes with Larry this morning. Larry, could you please pronounce and spell your entire name? And tell me what you'd rather be called. My name is Lawrence, L-A-W, Canarelli, C-A-N-A-R-E-L-L-I, and I'm known in the Las Vegas industry and social circles as Larry Canarelli. How are you this morning? I am great, thank you. Fantastic. I'd like to start this morning—you are really our first interview with Building Las Vegas, this project that we're so excited about. So I want you to teach me this morning all about your industry. But I'd like for you to start with talking about your early life and where you grew up and what that was like. Shevlin-Hixon Lumber Company, Bend, Oregon. Image from the Martin Moriesette collection. http://www.trainweb.org/highdesertrails/shlco.html 2 I was born in Roseburg, Oregon, shortly after World War II. When the war ended, my father was released from the military in the Portland, Oregon, area. It was in Oregon where he met my mother. She had my older sister when she was sixteen and she was eighteen when I was born. My father had minimal education. After the War ended he found work as a laborer in the lumber camps in Oregon. We lived in the Roseburg, Oregon, area, which for many years was the lumber capital of the United States. We had no money and lived in a tent on the Umpqua River. Spell that for me. U-M-P-Q-U-A We just kind of foraged and lived day-to-day. Later, our tent caught fire and we lost everything. We then moved to the logging camp areas in the mountains of California and in the area below Yosemite National Park. For some period of time my dad found work as a roustabout 3 and a laborer in the logging camps. We were living in the mountains in a tent on the Merced River. My mother washed our laundry in the river. Later, we were able to move to a little logging shack in the mountains. For water, we caught the rainwater off the roof and collected it into a cistern. We next moved out of the mountains and down into the San Joaquin Valley, [California,] where my dad found work as a laborer on a dairy for a dairy company. I was almost four by now and we had moved around a lot. The dairy company provided our family with a two-room shelter. We had no bathroom and had to dig an outhouse. I never saw indoor plumbing until I was almost six years old. We had a water-well hand pump out in the front yard. We had to pump the water from our well and bring it into the home. There was a little side-room closet where my parents slept and the children all slept in the main room. The dairy company brought a container of raw milk around every day. Every Saturday we were all allowed to go down and take a shower in the milking barns where they washed the cows. My dad, who was an alcoholic, would later quit his job and simply abandon the family. At 21 years old, my mother was left with having no education and four children. I was placed in a Pentecostal orphanage, with a large group of other children. My older sister and my two younger sisters were also placed in the orphanage. My older sister and I had to take responsibility for my two- and three-year-old sisters. At five years old, I was the youngest boy at the orphanage. This was the first time that I had lived with indoor plumbing and indoor showers. I thought that was pretty cool. I was able to leave the orphanage before I started second grade. My mother had married my stepfather and we lived in a small one-bedroom house. My mother would have two more children—so, there were six children in my family. In the second grade, I had to walk two miles home after school, picking up my younger sister from the 4 babysitter on the way home—so we didn’t have to pay the babysitter for the afternoon. We rented numerous other houses as I grew up. When I was nine years old, we moved out to a rural area and I got my first paper route. I found a house for sale in the classified listings of the newspaper. The terms of purchase only required the buyer to take over the payments for a VA [Veterans Administration] loan. I knew that my stepfather had been in the Air Force, so I showed the ad to my parents. I was not quite ten years old. My parents called the man about purchasing the home and took me with them to make the deal with the seller. They bought the home assuming the seller’s existing loan and my parents paid him a down payment of $80 from my mother’s tip jar. That was the first house we ever bought and my first permanent home. I had moved twelve times in my life by then and I was only nine years old. That was the last time I moved until I left for college. So, the home we owned was a small, three-bedroom, one-bath, nine-hundred-and-fifty square-foot house, which was home for our eight-person family. So which city was that? I was raised in Madera, a farming community in the San Joaquin Valley, California. Growing up, I was kind of like the migrant worker. I had two paper routes, I baby-sat, I picked cotton, and I rolled raisins and cut grapes. I did anything I could to make money. You could say that I was pretty enterprising. I always had more spending money than any of my friends, as I was allowed to keep all of the money that I earned. Wow. Your mom had a tip jar; from what kind of work? My mother worked as a waitress now and then. My stepfather was a laborer. It was hard to get work in the mid-nineteen fifties. At this time, he worked as laborer at an agricultural feed store where he made $1.50 an hour trying to support eight people. I was very aware of money at the time and always wanted to make something out of 5 myself. I don't have any idea where my inspiration for success came from. My parents never really pushed me in school or made me work to earn money. I was a smart kid and always assumed I would go to college. One of the houses that we rented, when I was eight years old, was adjacent to the city library. The librarian took an interest in me and worked with me. I wasn't in the top reading group in my school, but they had started testing for math skills and realized how smart I was. The librarian at the Madera [County] Library realized my interest in books and pushed me to check new books out every day. By the summer when I was nine years old, she was letting me check two books out a day. Madera County Library, Madera, California Every day? Yes. With the librarian’s help I was able to improve to where I was the best student in English in my grade level in school. So I had a little help, a few breaks along the way. I went through high school and always planned on going away to college. It never dawned on me that I wouldn’t go 6 to college—even without any monetary assistance or outside direction. College was reasonably affordable in the nineteen-sixties. If you were accepted into the University of California, the tuition wasn't even a hundred dollars a semester. The dormitory cost for the whole school year was eight hundred fifty dollars in 1964. So I went off to university. I saved most of my money and I could figure out how to pay the hundred dollars for the tuition. Because the books were expensive, getting the money for your books was a little tougher. I graduated from UCLA with a degree in economics. I'm not sure that means anything other than you have a college degree. College life, along with the education itself, helps one to mature. All of my life, I had an interest in housing. Perhaps this is because of never having a house when I was younger. The subdivision where my parents assumed the loan and bought our family home was a typical housing subdivision like you might have seen in Las Vegas in the 1950s. Growing up, I always walked the subdivision homes under construction in my area and talked to the builders of the homes. When we visited my grandmother, who lived in Fresno, she had these books that showed the Beverly Hills mansions. By the age of ten, I became fixated with these beautiful homes. So, it just became my dream, more than owning a Corvette or a Cadillac, to have a nice home. I never worried about fixing my car up with chrome rims or having white wall tires on my car. Instead, I always worried about where I was going to live and the house I was going to have when I grew up. When I graduated from UCLA in 1969, I had to spend two years as an officer in the [U.S.] Army during the Vietnam era. I was fortunate and did not go to Vietnam. I was able to serve my Army time as an environmental test officer in Alaska. I met my wife in college and we 7 were married shortly after we graduated from UCLA. My wife went with me to Alaska, although we had no idea if we could get housing. The colonel who was in charge of the U.S. Army base in Alaska met us the first day we arrived. He laughed at me and joked, “well, you guys need housing.” So he assigned us a three-story house unit on the base. I thought then that I was headed right toward my future mansion. I enjoyed my time in the Army. Immediately after I was released from the Army, I was able to enter graduate school for two years at the University of Southern California. There, I earned a Master's degree with a specialty in finance and entrepreneurial studies. While I was attending graduate school, I worked as an intern on one of my graduate programs for a man who was a member of President Nixon's commission for redevelopment of the inner cities of the United States. His study area was Los Angeles. So, he sent me into the barrios of Los Angeles 8 and into all the downtown redevelopment areas under a program called Las Colinas de Los Angeles. Partly through this education assignment in the redevelopment field, following graduation, I was able to gain entrée directly into the home building field. Without this background a student out of college has no chance to get directly into construction management and home development. So, I was fortunate get a start from the marketing and architectural development side of the industry. Immediately upon graduating with my Master's degree, I was hired by a big national home building company named American Continental Homes. So before you start telling me about that I just want to go back to a couple of things. What does it mean to roll raisins? Well, if you go back to my migrant worker days, you cut grapes from the vines and lay them out on paper in the middle of each row in the vineyard and there they dry. After the grapes dry they become raisins and they need to be picked up from the fields. We'd go back into the fields and roll the dried raisins up on the paper and then they have to go through with a truck and pick all those up. It was back breaking work, but you made a lot of money. In fact, I could make two or three times what I could make working on the other jobs. I also had jobs as a short-order fry cook and many other kinds of jobs. But that's what is meant by rolling raisins. Wow. Tell me a little bit about your brothers and sisters. You with all of this work ethic. Tell me about them. Well, my older sister is two years older than me, and she was a great influence on me. She always looked out for me, and the two of us had to look out for my four younger sisters. I had five sisters and I was the only boy. My older sister and I were sort of in charge of our younger sisters. I'm not sure we did a good job of guiding them, but we did a good job of making sure they were fed. Again, my older sister was very responsible, even more so than me in looking out 9 for the family. After high school, my older sister was able to live with a great-aunt we had in San Francisco. This allowed her to go to college at San Francisco State College. This helped to provide a path and expectation for me that I would also continue on to college. My younger sisters did not seem to have the drive for higher education. So, of my four youngest siblings my youngest sister was the only other sister to go to university and graduate. One of my sisters is a teacher and another was a CPA. Tell me about some of those first books that you started reading when you were reading those two books a day. Yes. Well, you'd be somewhat interested in them because the main interest a young boy has, at least I did, was in history and whether it was John Paul Jones, with the British sinking his ship during the American Revolution, or some of the Lewis and Clark kind of stories. I was also interested in early American fur traders and trappers. I read all those books. They just came out with the movie The Revenant. I knew everything about The Revenant from the fur-trading books I read when I was eight years old—and here I am at age sixty-nine watching the movie. I knew everything they were going to do in the movie from the cache of furs and all the survival story. So, I read a lot of short books and books on history which I found fascinating, whether it was the Spanish explorers such as Pizarro or the other Spanish Explorers looking for the Seven Lost Cities of Gold, or even the French explorers such as De La Salle. I read numerous books on those guys and I read the books on almost all of the explorers; that was very exciting for me at an early age. This sparked in me a real interest in history. The love of reading and learning about history helped me to educationally catch up and push past my peers. Great. So now I want to get back to the home builders. American Continental? 10 Thank you. Yes, in 1973, I went to work for a home builder. My office was in Santa Monica, California. The national home office was headquartered in Cincinnati, [Ohio,] and it was a publicly-traded company. The head of that company was Charles Keating, who later got in trouble with securities violations. The company did a lot of home building and development activity, particularly in the Phoenix area. Continental Homes was a huge builder of that day. In Southern California we built a lot of attached for-sale housing and apartments, mostly in the Los Angeles area and the San Fernando Valley. Like myself, everyone on staff was fairly highly educated. Three years later, I was hired at Metropolitan Development Corporation in 1976. The housing market had just gone through a bad recession in Southern California, where no one could sell houses. Fortunately, when I went to work for Metropolitan Development, it was one of the lucky breaks in my life. We were officed in Beverly Hills, which was a wonderful contact point. We also built in Tucson and had one new community in Las Vegas at the time. But primarily, we built new home communities in the San Fernando Valley of California and in the Los Angeles area. When I was hired, they sent me to study the Las Vegas and Phoenix housing markets. I ended up buying a lot of land for them in Phoenix, but I instantly had a love and affinity for Las Vegas. Las Vegas, as a business opportunity, was attractive to me because it is physically isolated like an island. There was desert all around, which isolated it from external influences. You could see it was a defined area in which to build and market and I quickly understood it perfectly. At the time, the market here was really Old West—Wild West, and it was extremely successful. Buyers were lined up out the door. Metropolitan Development’s leadership in Beverly Hills did not realize this. We had a project that was selling a hundred and fifty houses a 11 year out of one sales office here. Although it was a hugely successful single community, the executives only focused on coming over to visit Las Vegas every couple of weeks, spend a night or two, have dinner and go back to Beverly Hills. Nobody considered actually moving here. They let me be the cheerleader and start buying land and organizing new communities. Again, that was in 1976. By 1979, we had become the largest builder here in Southern Nevada. The other two competing, big builders at the time were Lewis Homes and Pardee Homes. I fashioned myself as a great marketer. Our style of homes came a lot out of Southern California ideas with bright windows and strong architecture. We were the first to heavily merchandise our models and landscape a model park. Lewis and Pardee were also started in the Southern California market and they did some of that, but we were much more aggressive in bringing that Southern California, natural style to Las Vegas. That’s what you still see today. Describe one of the properties to me, those early properties. Sure. Metropolitan had a real stronghold on the east side of town in the Nellis [Boulevard] at Sahara [Avenue] area. They ended up building more than 1,000 houses in that one area. Your basic community at the time offered generally three one-story houses and one two-story house—almost universally. It didn’t seem to matter who the builder was; the general mix of homes was pretty much the same. You may remember the Joe Blasco family, who developed Spanish Trail. They also owned quite a lot of land in and around that area that wasn’t included in Spanish Trail. In 1978, of course, they had not built Spanish Trail yet. I approached them to buy some of the land in the area and that was Metropolitan’s entry—as well as my own—into the southwest market area of the valley. A short time later, around 1980, another builder came on the Las Vegas scene, and that 12 was Signature Homes. They became very successful as well, and the four of these companies—Signature, Pardee, Lewis, and Metropolitan—would have been the four big builders at the time. The typical neighborhood offering in a new home development then was pretty similar across the board. A typical community of that time would have included home sites of usually six thousand square feet, sixty feet wide by one hundred feet deep. The homes offered would include three or four bedrooms, the kitchen, and a family room or an open room that didn’t even have a breakfast bar. Usually, the kitchen and family room were open to each other and they all had a living room to the front of the house. Houses styles of the time were all so similar. The smallest house might have only had one bathroom, but then there would probably be a three-bedroom, two-bathroom, and then a four-bedroom, two-bathroom model. The finish wasn’t very fancy or varied. Buyers relocating from the Midwest demanded two-story homes and that’s why a lot of two-story houses got started here beginning in the late 1970s. So tell me why. Well, many new homes buyers of that time—which continues through to today—were moving from the Midwest and eastern USA, where two-story homes are more the norm. They moved their families westward from the East, where they were used to having two-story homes. It was a good house style for family livability. That became the driving force for introducing the two-story houses to Las Vegas. Not that the families coming from California didn’t want them as well. Then as far as the typical size of the homes we built at that time… The smallest house in a sub-division might have been only a thousand or eleven hundred square feet, going up to, perhaps, eighteen hundred square feet for the larger homes. By the later eighties, we even got so chancy that we built up to three thousand square feet for the largest house. We’re not addressing the custom home or anything like that. At that time there was very little custom housing. There 13 were a few entrepreneurs developing half-acre lots for individual purchase. But there were few organized companies specializing in custom construction. That’s what housing was like in Las Vegas in the 1970s and 1980s. I stayed as president with Metropolitan Development and we were the biggest builder in Southern Nevada for five straight years—'79, '80, '81, '82, and '83. In 1984, an opportunity presented itself and I left and started American West Homes. So why did you decide to go on your own? Well, I've always been an entrepreneur. It was a very difficult market in Las Vegas leading up to this change, in 1980 and '81 and '82. Mortgage rates for home loans were 17 percent, and construction borrowing for the builders at the banks was 20 percent interest. So it was very, very difficult to make the market go. Las Vegas had peaked in permit levels at, I think eight thousand five hundred in 1979. Unfortunately, by 1981, I don't think there were even one thousand single-family permits pulled for the year. Even faced with the huge difficulties that I just spoke of, as president of Metropolitan Development, I had led the state in homebuilding permits for each year from 1979 through 1983. The success that I had enjoyed, even in the face of the huge market difficulties, gave me the confidence to leave and start my own company. Those were exciting times, and by 1986, American West was the largest builder in the state. So by that time who had you met in the city that helped to make American West possible for you? Well, that's a nice question. I was fortunate to have met quite a few wonderful people in my short initial time in Las Vegas and I had a pretty high profile in the building community. There were two brothers, the Collins brothers [E.A. "Al" Collins and Martin "Mart" Collins], and they were pioneering Las Vegas guys. In 1949–1950, they came here from the Reno area. They had 14 experience as roofing contractors but hadn’t built a lot of houses. In the 1960s–1970s they dove into the home-building market here and built some beautiful subdivisions that are standing the test of time today. They were well respected and had a really, really fine name. Fast forward to 1984. The Collins Brothers knew what I had done with Metropolitan and they told me that if I would leave and start a home-building company that they would agree to sign bank loans for me. So with that and thirty-eight thousand dollars that I was able to borrow— that was the only cash we ever had to start American West—the Collinses personally guaranteed all of our loans, and we were off and running. They backed me when I started in 1984 and later they let me buy them out of the company in 1991. They later still invested in a lot of land opportunities with me, especially Mart Collins. He and I remained land partners in a vast amount 15 of land development in Las Vegas. I helped The Collins brothers create the now iconic west side neighborhood development, The Lakes at West Sahara. Together we traveled all over the western United States, learning all we could about massive man-made water features and lake front living. Fortunately, for me and American West, I was able to be the first production builder to offer housing in this new part of town. The planners of The Lakes accepted all of my marketing input and as a result, I understood The Lakes at West Sahara intimately and American West Homes built all of the original new home communities. Mart Collins was a tremendous influence on my thinking and my progression in the way I conduct business. He did it all with a lot of dignity. At the time I wasn’t aware of the impact he would have on my business life. I’m very thankful for the time I was able 16 to spend with and learn from Mart Collins and the people who surrounded him. So tell me About the Lakes. That's kind of a unique area of the city. As much as you can tell someone who doesn't know anything about it, how would you explain The Lakes? How did it come about? Just a little information about that area. It was a leapfrog development about two miles west of where the pavement ended at West Sahara and Rainbow [Boulevard]. In 1984 there were only a few random scattered desert residential properties west of Jones [Boulevard], let alone west of Rainbow. The Collins brothers paved Sahara for two miles west of Rainbow. It was a narrow two-lane road as the only access point to The Lakes back in 1985. The Lakes started as a master plan of twelve hundred and eighty acres. By its final approval, there were about seven or eight thousand home sites built there plus assorted apartment sites. The nice unanticipated benefit then was that it was insulated by that two-mile distance from the existing old hodgepodge development that typified the existing Las Vegas housing. At that time, there were a couple other areas that had been very strongly unified. Pardee had done a modest master plan in Spring Valley. Also, there was the plan known as Green Valley, created by the Greenspuns with Mark Fine. He did a nice job starting in the mid-1970s. While at Metropolitan, I had bought the biggest parcels of land in Green Valley and had built out the initial Green Valley communities prior to approaching The Lakes projects. I believed I understood that kind of development very well and I understood the buyer’s desire to be in a master-planned area. Up to that point, Green Valley was the only area really trying to look like a master pla