Two master-planned communities - Inspirada in Henderson and Kyle Canyon in Las Vegas - have received default notices on about $765 million in debt, a national publication reported.

The Wall Street Journal reported that two joint ventures involving builders and financially troubled Focus Property Group have each missed an interest payment in recent weeks and are in negotiations with lenders. The article quoted Focus Chief Executive John Ritter.

Ritter told In Business Las Vegas this week that he could not confirm any missed payments.

"Because we are under confidentiality agreements, I can't confirm or deny that," Ritter said. "We are working in both cases with lenders on restructuring the debt. In both situations it is a reflection of the current market conditions and builders are looking for solutions. This is a short-term situation and it should be resolved in the near future."

The joint ventures are negotiating with principal lender J.P. Morgan Chase & Co. on Inspirada and the Wachovia Corp. on Kyle Canyon, Ritter said.

Focus recently paid off its portion of the Inspirada loan, which now totals about $330 million, and also paid off its future costs, Ritter said. He declined to discuss Focus' status on the Kyle Canyon loan, which the Journal reported was $435 million.

"We are a minority partner with eight national home builders who have decided collectively to address the current market realities with the lenders on this project," Ritter said in a statement given to In Business. "I believe that at times like these, lenders and borrowers need to become partners, be patient, and work together to get through it. Those that do will come through this slowdown in good shape. In a market like Las Vegas it is not a question of value, but one of timing and liquidity. The value still exists for those who are willing to work together thoughtfully and logically but today there is very little liquidity in any facet of the real estate market."

Last week, Toll Brothers, in a filing with the Securities and Exchange Commission, warned it could suffer "significant" losses if its joint venture partners didn't honor their obligations. The company didn't cite any projects by name, but the attention turned to Focus which came into the national spotlight after the firm announced in February it missed an interest payment nearly $500 million-plus in debt and was trying to restructure it with lenders. The property was outside of its investments with Kyle Canyon and Inspirada.

Focus turned heads in June 2004 by partnering with seven homebuilders to pay $557 million for 1,940 acres in Henderson in a federal auction. Eight months later, Focus Group and eight builders paid $510 million in buying 1,710 acres in Kyle Canyon.

It owns 15 percent of Inspirada and 23 percent of Kyle Canyon in an arrangement meant to spread the risk. The ventures were considered a new strategy in the home-building industry in which Focus went to Wall Street and elsewhere to raise money to buy the tracts.

In Inspirada, the nearly 2,000 acres is divided among eight homebuilders of which KB Home has the biggest percentage at 48.8 percent. Focus has 15.5 percent; followed by Toll Brothers, 10.5 percent; Pardee Homes, 9.9 percent; Woodside 8.1 percent; Kimball Hill Homes, 6.6 percent; Meritage Homes, 3.5 percent, and Beazer Homes, 2.5 percent.

At Kyle Canyon, the homebuilders are Toll Brothers, Lennar, Pulte, KB Home, Kimball Hill Homes, Woodside Homes, Meritage Homes and Ryland Homes. It totals more than 1,700 acres and remains in the planning stages.

In his Wall Street Journal interview, Ritter said Inspirada and Kyle Canyon Gateway have failed to meet the sales pace that the lenders expected. The projects' partners "are going back to the banks to say that the deals were structured based on former market conditions," Ritter said in the interview. "There are certain builders that can't live up to their obligations."

The article cited that some of the projects' partners are smaller, closely held builders who are in serious financial trouble. For example, Kimball Hill Homes, which is a partner in both developments, has said it's considering Chapter 11 bankruptcy protection.

If a partner fails, their obligations are passed on to other members of the group. That is forcing builders to decide whether to infuse more capital or let the projects go into default, the article said.

There have been fewer than 200 homes sold in Inspirada, said Ritter who added that instead of building out the project in seven years, it may take 10 to 15 years because of the housing slowdown.

Focus is negotiating with several local lenders and mortgage brokers on renegotiating $480 million in loans taken out for 12 to 24 months at interest rates of 11 to 12.5 percent. Focus is trying to stretch out the payments after it defaulted on the loans. In one case, a lender is expected to start foreclosure proceedings on $30 million of that total on land in Las Vegas, Ritter said.

That money was used to acquire 4,800 acres of other land holdings in Las Vegas, Pahrump and Victorville, Calif.