London company offers to develop Moulin Rouge site

A London-based company, PSI KEY Entertainment, is looking to turn the 15.5 acres between Martin Luther King Boulevard and H Street on Bonanza Road that make up the Moulin Rouge and the surrounding site into a 1,288-room resort.

The Moulin Rouge has a 60-year history of failed development attempts and went into receivership in 2013. The receiver of the property, Kevin Hanchett, filed a motion in Clark County District Court on Wednesday to seek approval for the sale to PSI KEY Entertainment for $10 million.

A judge will consider the motion to approve the sale Nov. 18.

PSI KEY declined to comment. But in a development proposal and business plan company representatives gave to at least one member of the state Assembly in early October, the company said that the Moulin Rouge resort would be the “foundation and flagship of the Historic Westside redevelopment plan.”

The redevelopment plan includes a new “elevated transport system that will bring guests from the airport, through the Las Vegas Strip, past the Downtown area to the Moulin Rouge.”

A 60,000-square-foot casino floor would be accompanied by a 500,000-square-foot convention center, a 20,000-square-foot spa and gym, restaurants, nightclubs, bars and several “live show” theaters.

The resort would have a Moulin Rouge Museum that would honor civil rights and African-American history, “showcasing figures of yesteryear throughout history in an artistic immersive and interactive 3-D and holographic experience.”

Katherine Duncan, president of the Ward 5 Chamber of Commerce, has been encouraging PSI KEY leadership to submit an offer on the property since August.

“They want to make a whole new tourism destination in uptown Las Vegas,” Duncan said. “I’m very pleased, I’ve been waiting for this.”

Duncan has been working as a “coordinating agency” since her group was unable to come up with the funds to buy the property for development in February.

“One of their (PSI KEY’s) major challenges has been just understanding where our local government is on the project,” Duncan said. “This property has 60-year failed development, and they’re trying to make sense of it and figure out what the government’s temperatures is on the project — what kind of consensus is there to help the developer clean up the homeless for example? There are a few challenges with this development.”

The purchase agreement includes a 30-day feasibility period, during which PSI KEY will determine whether to develop the property as planned.

Hanchett said if he receives a better offer before Nov. 18, he will ask the court for the option to close on the best deal available.

The filing of the motion has been preceded by several months of interested parties submitting offers but failing to deposit earnest money.

Georgia-based AMA Realty Group LLC put a $9.5 million offer on the property in July but failed to deposit earnest money in escrow.

Las Vegas-based Moulin Rouge LLC, managed in part by Scott Johnson, has an offer in of $10 million but has yet to fund earnest money. Johnson is a former member of Moulin Rouge Holdings LLC, which failed to close on a sale of the property for $8 million in June because of company infighting and AMA Realty’s higher offer.

Johnson did not return a telephone request for comment but said in July that though the property was originally up for $8 million, it is worth putting in an offer for $10 million because the property is “potentially worth a lot more.”

Hanchett said the three interested buyers who have been eyeing the property for the past few months “is the most number of active buyers willing to submit purchase of sale agreements at one time that we’ve seen.”

He added that he is hopeful that this round of offers will lead to a successful closing on the property.

“The level of sophistication of the buyers is increasing, and I believe that their financial wherewithal is also increasing,” he said.

Contact Nicole Raz at nraz@reviewjournal.com or 702-380-4512. Follow @JournalistNikki on Twitter.