A developer behind a planned $5 billion Olympic sports complex in North Las Vegas is working to take the project public in the face of tighter private money.
Las Vegas-based Ultimate Sports Entertainment has agreed to be acquired by American Southwest Music Distribution, an Over-The-Counter-Bulletin-Board music distribution company specializing in Latin hip-hop based in Hollywood, Calif., in hopes of kick-starting financing of the amateur sports facility.
Details of the merger were not released pending approval of the shareholders of both companies.
The new company, Ultimate Sports Resorts, will continue work on the $5 billion Ultimate Sports Resort being developed for 116 acres about 11/2 miles south of the Las Vegas Motor Speedway on the west side of Interstate 15.
"This merger is not strategic in respect to what assets they bring to our collective formula," said Ultimate Sports Entertainment President and Chief Executive Matt Rose. "It’s a merger because we’re coming together in a public company. Their shareholders would rather have shares in the Ultimate Sports Resorts than a Latin hip-hop company."
The 17 million-square-foot complex is designed with a 26,000-seat arena augmented by smaller sports complexes, a 150,000 square-foot casino, a 5,200-room hotel and 500 condominiums and time shares, according to the project’s Web site.
Rose has spoken with North Las Vegas city officials over the years and received support from the mayor and City Council. But land for the project has yet to be secured, so the it still needs approval for zoning and entitlements.
North Las Vegas Economic Development Director Mike Majewski said the city last spoke with Rose in late 2007.
"It’s an ambitious project," Majewski said. "But if you don’t dream, you don’t grow and you don’t expand. The business plan and the concept is great. We’ll help him in any way we’re able to."
Rose said he was under contract to buy the land 18 months ago but let a 60-day deadline expire after putting nearly $98 million in escrow. He said the land is still for sale and he still has a "wonderful relationship" with the parcel’s owners.
Michael Sullivan, a finance professor at the University of Nevada, Las Vegas, said the merger might be the best hope for the project to raise money because banks are tightening their lending portfolios.
However, potential investors in these types of deals need to take a "buyers beware" approach.
"You’d have very limited information as an investor," Sullivan said. "It’s going to be based on how well they sell it and how well people buy into it. It could be very viable but it could be very risky."
Plans for the project were unveiled in January 2006 with Rose saying money was not an issue. The project was to break ground in late 2006 and be complete in 30 months.
Rose said Monday the banks put financing of the project on hold when the real estate market started to slide, prompting the move to finding a way to take the project public.
"It just seemed unrealistic to try to bring dollars necessary to make the resort a reality through the private sector," Rose said.
Rose said he is aiming for a 2013 completion.
Contact reporter Arnold M. Knightly at email@example.com or (702) 477-3893.ON THE WEB www.ultimate sportsresort.com