Buyers again sought for land

A controversial hard money lender has a deal for you — and it involves investing in one of the highest-profile pieces of undeveloped desert in Nevada.

Mike Shustek, chef executive of MVP Mortgage, is soliciting investors who want to own a piece of 480 acres just south of the M Resort in Henderson.

Now owned by the Bureau of Land Management, the acreage has been in the news of late because Texas developer Chris Milam once promised Henderson city officials that he would build stadiums and arenas there to lure big-league sports teams to their city.

The city’s backing assured that the BLM would accept his bid at the rock-bottom price of $10.5 million, but then it sued, claiming fraud when Milam declared that the sports venues were not viable and he planned to sell the land for other uses.

Milam and the city settled the lawsuit last month with the understanding that Milam’s Texas-based creditors, Rocka­fellow Investments LLC and II C.B. LLC, would end up with the land while Milam would have no part of the deal.

Now comes Shustek, whose April 4 letter aiming to drum up investors begins, “MVP Mortgage is excited to share with you our newest first trust deed available for you for investment.”

It promises 9.25 percent annual interest paid monthly for a minimum $25,000 investment; 10 percent for $100,000 or more. The goal is to raise $18 million for a loan to Silver State Land LLC.

Silver State Land LLC is the company created by Milam for the BLM deal. Under the lawsuit settlement, the two Texas creditors are to take possession of the land under that name.

It’s notable that while Milam paid the BLM $10.5 million for the land, his total debt to the Texas creditors was $18 million.

Shustek doesn’t provide much information in his four-paragraph solicitation letter, and he could not be reached for comment last week.

Exactly what’s for sale is unclear. The letter says the borrower, Silver State, has “just acquired” the land; but the city of Henderson says that’s not true. The BLM will own it until the sale closes on May 13, and then only if the Texas creditors pay Henderson $4.25 million as part of the lawsuit settlement.

Shustek’s letter also says the “initial opinion of value on the property is approximately $72 million.”

If so, that’s a heck of a deal — nearly seven times the BLM’s appraisal when it put the land up for sale last year.

Milam could not be reached for comment on Shustek’s letter. A woman who answered the telephone at the offices of lawyers representing the Texas creditors said only that they are “aware of” the letter.

A spokeswoman for the Department of the Interior, which oversees the BLM, said Friday she needed time to look into the matter.

While Milam and the city have settled their differences, the land deal remains under federal investigation, in part because two former high-level BLM officials were involved.

MVP Mortgage’s website lists Shustek as chief executive, and says the company “is led by an experienced executive team that has originated and managed commercial real estate lending transactions valued in excess of $2 billion. The team has experience in real estate, lending and in the management of public companies.”

Hard money lenders such as Shustek raise money from investors to make short-term loans that are secured by real estate.

Shustek was known for hiring former NFL greats Joe Namath and Paul Hornung to appear in advertisements for a previous company that operated real estate investment trusts. His companies included Vestin Real Estate Mortgage Trusts I and II.

In a 2009 interview with the Review-Journal, Shustek said the Securities and Exchange Commission in December 2003 gave his former real estate trust company a notice of an informal inquiry.

“At the very end, there was an allegation that one or two of the slides out of 40 that we used (in presentations) might not have been accurate. I personally paid $100,000” to the Securities and Exchange Commission, Shustek told the Review-Journal at the time.

Henderson city officials learned of Shustek’s involvement last week. City spokesman Bud Cranor said anyone who ends up with the property must comply with the land’s zoning, which is designated for arena or stadium use.

The letter also has caught the attention of Idaho lawyer Harry DeHaan, who is trying to collect a $1.4 million court judgment against Milam from a separate real estate deal in Las Vegas.

“If it’s really worth $72 million, they certainly have taken advantage of the BLM,” DeHaan said Friday. “If they sell it for $72 million, they can give some of it to me.”

Contact reporter Alan Snel at asnel@reviewjournal.com or 702-387-5273.