ASPNET_ENV not working

Hi All:

I started with an empty asp.net 5 project. I am trying to implement the Development, Staging, and Production environment from the following:
http://docs.asp.net/en/theming/fundamentals/environments.html
When I added ASPNET_ENV variable in the project, I do not find launchSettings.json in the Properties folder.
And the IfDef does not seem to work (both environments are loaded). I appear to be missing a step.  Any ideas?

Phil