Not including Harmony Homes, Rhodes filed for Chapter 11 bankruptcy on behalf of many of his companies in 2009 and turned over most of his residential projects to creditors.
Among the opposed projects is a series of controversial efforts to develop a residential community at Blue Diamond Hill, located west of Las Vegas near Red Rock Canyon.
The communities would add 131,000 new homes, but residents and government officials were concerned about the amount of water that these projects would require upon completion.
The projects never materialized, and Rhodes subsequently used some of the property as farmland beginning in 2013, when he formed Kingman Farms and developed an interest in agriculture.
In the mid-1990s, Rhodes Homes built Palm Gardens and Elkhorn Springs, located respectively in the southeast and northwest Las Vegas Valley.
Ground water was also found to have higher than normal radioactive levels, but Rhodes Design and Development Corporation planned to proceed with the project.
"[21] Nearby residents were concerned about the presence of chemicals, as well as the size of Palm City and the increased traffic that the project would bring to the area.
[24][25] Since 2003, Rhodes has been involved in several controversial efforts to develop a residential community at Blue Diamond Hill, located west of Las Vegas near Red Rock Canyon.
Rhodes, through his company Gypsum Resources, initially planned for up to 5,500 homes on his 2,400 acres atop Blue Diamond Hill.
In April 2019, newly elected Clark County Commissioner Justin Jones motioned to deny Gypsum's BLM waiver request.
Rhodes filed a lawsuit against the county and its commissioners that year,[32] and it was later discovered that Jones had deleted text messages related to his 2019 vote.
[35] In 2005, he announced his plans to develop residential projects in Golden Valley and White Hills, both in Mohave County near the city of Kingman.
The completion of the Hoover Dam Bypass project was also viewed favorably, as it would cut down on the amount of travel time between Las Vegas and the proposed communities.
[52][53][54] At the end of 2006, Rhodes paid $58.6 million to purchase more than 1,000 acres of state trust land in Apache Junction, Arizona,[19] where he planned another residential community, separate from the other five.
The Arizona Corporation Commission (ACC) debated for years whether to approve Rhodes, as there were concerns about his past legal problems, as well as a lack of water in the area.
Rhodes testified to the commission in April 2007 that he was usually the victim in past legal disputes, blaming employees or immoral lawyers and business partners.
[78][79][80] In late 2007, Rhodes sold his Arizona water company to an Illinois firm that would manage it, negating the need for him to get approval from the ACC.
[41] In 2008, the Mohave County Board of Supervisors approved a zoning plan and development agreement for Pravada, despite continued opposition from some local residents.
[3] During the Great Recession (2007-2009), homebuilder Rhodes Homes faced limitations due to a 2005 loan agreement with Credit Suisse that restricted buying distressed properties.
[2][4] By 2009, Rhodes Companies had developed 40 communities and built over 6,000 homes in the Las Vegas Valley, generating $2.4 billion in revenue.
While Jim Rhodes estimated a significant number of creditors, he maintained minimal disruption to daily operations and ongoing development projects.
[2][56][86] At the time, Rhodes Homes was the third-largest private homebuilder in southern Nevada but faced financial difficulties with liabilities exceeding assets.
The creditors claimed that Rhodes was irresponsible with finances, alleging that he had recently used company funds to pay family members large sums of money for limited services.
[89][93] Later in 2009, Rhodes agreed to turn most of his Nevada properties – including Spanish Hills – over to lenders to close the bankruptcy cases.
[99][100] During 2012, because of poor economic conditions caused by the Great Recession, Rhodes returned 1,000 acres of Apache Junction land to the state of Arizona.
[103] Another attorney later denied local concerns that Rhodes would eventually build houses on the land, saying that his shift to agriculture was not just a temporary project.
However, on March 20, 1999, an entity affiliated with Rhodes sought to purchase the assets of a bankruptcy estate which included Palm Hills to which the receiver announced, "I am humiliated.
However, a written agreement was never made, and the lack of a paper trail led to a dispute between Rhodes and the city about which would be responsible for building the park.
Dunton claimed that Rhodes had later agreed to sell a portion of the land to him, before reneging on the deal and keeping ownership of all the acreage.
[140] Rhodes has attributed many lawsuits on corrupt lawyers, stating that they had recruited clients to sue housing developers for minor issues.