Developers of stalled Las Vegas casino project seek to keep plans alive

Last fall, the developers of a stalled casino project faced some stark words at a Clark County Commission meeting.

With the team behind Dream Las Vegas asking for more time on their approvals again, Commissioner Jim Gibson said the situation “can’t go on forever,” that officials want projects they “believe are really happening,” and the likelihood of more extensions down the road was “remote.”

Now, the developers are back with yet another request for more time — after county officials were told multiple times over the past two years that the developers were closing in on funding and planning to restart the still-halted project.

Clark County commissioners on Wednesday are scheduled to consider a request for a third time extension on the Dream hotel-casino project near the south edge of the Strip. The developers, from Southern California, broke ground in summer 2022, but construction crews stopped less than a year later with the developers owing tens of millions of dollars.

County staff recommended denying the latest extension request, writing in a report that the project, under the terms of an agreement with the county, is classified as abandoned.

Dream developer Bill Shopoff could not be reached for comment last week.

However, he said in an interview in August — after he transferred ownership of the site to Dream’s lead contractor following a legal settlement over unpaid bills — that the project kept getting delayed amid volatile financing markets.

He cited higher borrowing costs and bank closures, as a wave of lender failures rattled the economy a few years ago.

He also said his group intended to buy the property back from the contractor and build the resort.

“But I will tell you, it’s been hard,” he said.

‘They will be paid’

Shopoff, founder of Shopoff Realty Investments, and David Daneshforooz, founder of real estate firm Contour, teamed up to acquire their project site for $21 million.

They closed the purchase, and announced plans for Dream, in February 2020 — the month before the coronavirus pandemic turned life upside down and shut off much of the economy overnight.

Clark County commissioners approved plans for a 20-story, 527-room hotel-casino in fall 2021, and the developers held a ceremonial groundbreaking in summer 2022.

Dream, on Las Vegas Boulevard just south of Russell Road, was designed to offer a smaller, boutique-style experience in a corridor dominated by massive resorts with thousands of rooms apiece, huge casino floors and lengthy lists of amenities.

Construction got underway but eventually came to a halt.

The lead contractor, McCarthy Building Companies, filed a lien in March 2023 claiming more than $40 million was owed for work on the site. Several subcontractors, including electrical, steel and drilling companies, filed liens as well, the Las Vegas Review-Journal previously reported.

Shopoff told the newspaper in March 2023 that he owed approximately $25 million to $30 million for work on the resort, that construction had “fully stopped,” and that the work would restart once financing terms were finalized.

At the time, he said that he expected to finalize the terms potentially in the next couple of weeks and that his group fully intended to honor their agreements and pay their builders.

“They will be paid, and the project will get built,” he said.

‘Full restart of construction’

Months later, the developers asked the county for a one-year extension on their plans.

Land-use attorney Tony Celeste of law firm Kaempfer Crowell, representing Dream’s developers, told the county in a letter dated Oct. 4, 2023, that his clients expected to close on financing deals by December, with a “full restart of construction” on Jan. 1, 2024, county records show.

Shopoff Realty’s senior vice president of design and construction, Bill Smith, told county officials in an email on Jan. 10, 2024, that his team planned to close on a construction loan toward the end of February and that McCarthy would resume construction around March 1.

The project site, however, remained at a standstill.

Celeste wrote in a letter on Sept. 13, 2024, that his clients were in discussion with “multiple capital partners” and expected a new loan in the fourth quarter, “with construction starting shortly thereafter.”

He also wrote that the developers had finished about 19 percent of the construction on the project and invested more than $123 million.

Dream’s developers sought a two-year extension on their plans. But the County Commission only approved an extra nine months after Gibson, whose district includes the site, made a motion at the Nov. 20, 2024, meeting for the shorter timeframe.

“We know there are outstanding balances to be paid to contractors and subcontractors. … That matters to us,” Gibson said. “We care that all of those dollars be paid in a timely way.”

He noted that the extension gave them more time to restart the project but that the likelihood of another extension “is remote.”

He also said the county would need regular reports to continue “on the pursuit of the financing.”

Gibson did not respond to requests for comment.

Financing plans

Celeste told the county in a letter on Jan. 9 that the developers were negotiating a term sheet for “remaining project equity” and expected to restart construction by the second quarter.

He wrote on July 3 that his clients expected to resume construction by the third quarter.

Then on Aug. 18, with the developers requesting their third time extension, Celeste wrote that they were in “final underwriting” with four lenders on a loan that was expected to close in the next four to six weeks.

The loan would satisfy all outstanding payments to the general contractor and other vendors, he wrote.

He added that the developers were also in negotiations with three “equity providers,” or investors, and that his clients expected to close those talks in the next two or three months, allowing them to complete their funding structure.

This, he added, would let the lead contractor restart construction in the fourth quarter.

Celeste did not respond to a request for comment.

In September 2020, Clark County commissioners denied an extension request for an extreme-sports park south of the Strip that never came out of the ground.

At the time, the county’s then-planning director, Nancy Amundsen, confirmed that the vote effectively rendered those plans dead and that the developer would have to file a new application if he wanted to build a major project on the site again.

‘Continued to promise new loans and funding’

McCarthy, meanwhile, now owns the partially built Dream site.

The construction firm had sued Dream’s ownership group in Clark County District Court in summer 2023, seeking a judgment for the principal sum it was owed.

McCarthy wrote in a court filing that it was paid regularly until September 2022, when the developers quit paying the construction firm’s invoices “due to an alleged lack of funds and ‘circumstances beyond their control.’”

It also alleged in the court filing that the developers “continued to promise new loans and funding” with hopes of restarting the project, “to no avail.”

According to a court filing this spring, a settlement was reached in the case but could not be completed until Aug. 20.

The deed transferring ownership of the property was recorded with the county on Aug. 21.

‘You’re the leaders’

Even before the financing issues, Dream faced plenty of hurdles.

The pandemic crippled Las Vegas’ tourism-dependent economy just weeks after the developers announced their plans, with the Strip becoming a ghost town of shuttered resorts and unemployment soaring past 30 percent at one point.

Also, the developers made a series of design changes, including enhanced security measures, after facing concerns from the Transportation Security Administration and major airlines due to the site’s proximity to Las Vegas’ airport.

The TSA, for instance, worried the project would increase risks to planes and passengers “due to active shooters and the ability to throw things over the fence.” The agency also feared that Dream’s proposed service road would make its border with the airport more susceptible to bombs hidden in such vehicles as garbage trucks, county records show.

Dream’s developers also discovered that the pinball arcade next door was a little too close.

The Pinball Hall of Fame opened in a newly built facility on Las Vegas Boulevard in spring 2021 but encroached by at least eight feet on Dream’s property, according to a lawsuit by the hotel’s developers.

Pinball’s attorneys pointed to a likely surveying error by a contractor, court records show.

The case was settled.

Dream was poised to bring a burst of commerce to a stretch of Las Vegas Boulevard that features megaresorts such as Mandalay Bay and Luxor on one side of the street and a drastically different landscape on the other.

That side of the street includes the Dream project as well as low-slung motel properties, some retail space, empty lots, and a never-finished Ferris-wheel project that, for more than a decade now, has consisted of two giant concrete columns sticking out of the ground.

Gibson alluded to the area’s mixed landscape at Dream’s groundbreaking event more than three years ago.

“We have some work to do to finish off this end of the Strip, and … you’re the leaders,” he said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.