Merger Moves $5B Las Vegas Mixed-Use Sports Project Forward
- Mar 11, 2008
Ultimate Sports Entertainment Inc., developer of a planned sports-centric mixed-use project in Las Vegas, has committed to being acquired by American Southwest Music Distribution Inc. in a an agreement that will facilitate financing for the $5 billion development.Faced with the negative consequences of today’s challenging lending market, Las Vegas-headquartered Ultimate Sports sought alternatives for financing its 17 million-square-foot project, and for increasing shareholder value. The answer was to sell to West Hollywood, Calif.-based American Southwest and go public. “The capital market loves us, but they still have a loan-to-cost ratio,” Matt Rose, president & CEO of Ultimate Sports, told CPN today. “They want 30 percent. That would be about $1.5 billion and I don’t have $1.5 billion.” Financial details of the merger have not been released, but Rose did describe the deal as mostly a reverse merger, noting that American Southwest “was willing to work with us in exchange for shares.” The company that will emerge from the unification, Ultimate Sports Resorts Inc., will continue development of the project. Sited on 116 acres, the multi-faceted family-friendly Ultimate Sports Resort will center on a series of sports venues, including a 26,000-seat main arena, swimming center, driving range, shooting range, bowling alley and ice skating rink. The resort, however, will also offer other features typical to mixed-use projects. Over 5,100 hotel rooms, ranging from mid-market accommodations to luxury suites, are planned, as are 500 upscale condominium units and 1 million square feet of convention space. Other components will provide 150,000 square feet of casino space, and 100,000 square feet of retail and restaurant space.With sports entertainment at the core of its design, the Ultimate Sports Resort will provide an element not seen at such a grand scale at the bevy of multi-million and multi-billion projects in the works in Las Vegas. Among the endeavors is the $3 billion Cosmopolitan hotel and casino, for which Global Hyatt Corp. and Marathon Asset Management L.L.C. recently committed to providing financing. The property will have 3,000 hotel rooms and condominium residences, as well as an 80,000-square-foot casino, 265,000 square feet of restaurant and retail offerings, 150,000 square feet of convention space and, most notable, a five-acre beach and three wedding chapels.There is a 42-month build-out for the Ultimate Sports Resort; however, no date has been set for the commencement of construction just yet. “If I didn’t have to go through the entitlement and permit process,” Rose said, “I could break ground tomorrow.” Ultimate Sports Entertainment is a privately held company established for the purpose of developing and building Ultimate Sports Resort. American Southwest, a partner of Universal Records, was created as a public company to form a niche market in the production, marketing and distribution of new musical talent through traditional and non-traditional vehicles.