The Timeshare Beat
October 18, 2000
MPTV, Inc., (OTC BB:MPTV.OB) which has been trying to get its timeshare project in Las Vegas off the ground for 8 years, may finally be seeing the light at the end of the tunnel-- and if all goes smoothly, this time it's not a train.
This is the week when financier Oxford International is scheduled to arrive in Las Vegas for a “pre-closing review” of the property, prior to completing a $52.5 million construction loan to the company. All other conditions required by Oxford have been met by MPTV, and company CEO Hurley Reed is confident that the loan will be completed and that construction can shortly begin on the first phase.
This preview of the property follows closely on the heels of the announcement Oct. 12 that MPTV had signed an agreement to acquire joint venture partner All Star Resorts' interest in the Lake Trop LLC in Las Vegas, Nevada. This acquisition gives MPTV, Inc. 100% ownership of the LLC, clearing the way for MPTV to develop the Lake Tropicana Timeshare Resort and Towers. The joint venture with All Star Resorts, which at that time formed the Lake Trop, LLC name for the enterprise, was originally announced in June of 1999.
The property in question is the former Lake Tropicana Garden Apartments on Harmon Ave., which was formerly owned by Glen Ivy Resorts, Inc. The late James Vellema, who had been a major player in Glen Ivy, formed Consolidated Resort Enterprises in 1992 in order to purchase the property after Glen Ivy declared Chapter 7 bankruptcy.
Following this acquisition, Vellema purchased a non-timeshare related publicly registered company named MPTV, a Nevada-registered corporation, for the purpose of using it to raise capital via the stock market. In December 1993 CRE completed a "reverse" merger in which the owners of CRE exchanged their shares of CRE for 75% of the outstanding common stock of MPTV and became the principal shareholders of MPTV. As a result, CRE became a wholly-owned subsidiary of MPTV.
Hurley Reed took the reins as CEO following the death of James Vellema earlier this year. Hurley Reed, who had initiated and developed the Glen Ivy Management Company which controlled 22 resorts and 30 associations with an annual budget of $25 million serving 50,000 timeshare owners, began serving as a Director of MPTV in December 1993, and as President and Chief Operating Officer of MPTV in November 1994. From December 1993 through October 1994, he served as Executive Vice President of the Company. Mr. Reed's last position at Glen Ivy was Executive Vice-President and Chief Operating Officer.
The move to turn the Lake Tropicana Garden Apartments property into a timeshare resort was, at the time it was purchased, considered either daring or foolhardy, depending on whose opinion was solicited. During that period and well into the late '90s timeshare in Las Vegas was still in its infancy, dominated by the Jockey Club, Polo Towers and the beginnings of Hilton's efforts in the city. All of these properties were on The Strip, and MPTV's location off The Strip was considered marginal at best.
Since that time the "Harmon Corridor", as it has come to be known, has exploded with growth, undergoing a major transformation. The Lake Tropicana Timeshare Resort and Towers project is now strategically located between the MGM Grand Hotel/Casino, the Aladdin Hotel/Casino on The Strip and the Hard Rock Cafe on Paradise and Harmon Avenue. Directly across the street timeshare titan Fairfield Communities is building its new flagship resort, the +400-unit Grand Desert, and other timeshare projects are planned for the area as well.
In addition, major timeshare companies have been building in other areas outside the actual scope of The Strip, with excellent results, and the University of Nevada at Las Vegas is even developing a special curriculum that will offer timeshare as a subject within its hospitality venue.
Las Vegas has suddenly come of age as a timeshare destination, and is rapidly becoming the timeshare hub of the American west, even looking to eventually knock Orlando off its traditional perch as timeshare center of the world.
All of this is very promising news for the long-suffering investors in MPTV, who have ridden a financial roller coaster with the company for years in hopes of finally seeing success and getting some return on their money.
In an interview Oct. 17 with OTCNN.com, by Jack Burney, Reed said the company is going to "re-do 5 buildings with 8 apartments each into 40 time-share units.”
With approval from Clark County in place, the company intends to convert these apartments into "villas", with refurbishing to be complete within 3 months of closing the loan. The new timeshare units will be deluxe two-bedroom suites with fireplaces, marble baths and kitchens, upgraded plumbing, air conditioning, and deluxe furniture, fixtures, and appliances. In addition, plans are to construct a decorative block and stucco wall around the property, extensive landscaping in the front, and a new sign at the entrance. All of these features will be brightly illuminated to draw attention to the project at night. A guardhouse is also planned for the entrance to the project. All of the exteriors of the buildings will be repainted and the waterfall and lagoon will be repaired.
This is the first phase of the project, which will also include new roofs, the current railing replaced with stucco walls, and new patio doors and windows will be installed.
The second phase, to be financed by Oxford, calls for the construction of an additional two towers with a total of 155 2-bedroom lock-off suites each, with a 58,000 sf building in between for a fitness club and possible other timeshare-oriented facilities. Phase two also includes an attractive lobby area and a 16,000 sf sales office on the top floor of the high-rise building. The sales office will remain on the property after initial sales are completed, so that brokers can resell vacation ownership intervals for the owners who wish to sell their property. The broker will charge a commission for this service, much like any real estate transaction. They also will be available to resell any intervals that come back to the developer due to the default of the note. Also planned in this phase is the construction of a new pool with a waterfall, and a tennis court.
The expected revenue as a result of all this could add up to more than $344 million in sales over the next 5 years.
“It will probably be a year before we can begin construction on the towers,” Reed said in his interview with OTCNN.com.
Of perhaps equal interest to investors and the timesharing community is Reed's mention of opportunities for timeshare in Hawaii, where for some time the company was working on timesharing the Kona Reef Resort on the Big Island of Hawaii. Their affiliation with Reefshare, Ltd., which owned the condo units to be timeshared, fell apart last year. Since then Diamond Resorts International, which owns Polo Towers and The Jockey Club in Las Vegas, purchased 25 condos from Reefshare, Ltd and is marketing them as their new Kona Reef Resort.
Reed mentioned that they are looking for property owners who will joint venture with them on a unit-by-unit basis until each is sold out, which avoids the need to find the millions in financing that was required for the Las Vegas property. This is a common theme in timesharing, practiced in one form or another even by the largest developers since it makes financial sense for both the companies and their shareholders to sell out one phase before beginning construction on the next.
According to the article in OTCNN.com, "Reed revealed guardedly that MPTV is talking seriously to such an owner in Hawaii, and has targeted others in California for investigation."
But first the company must close the deal with Oxford International and get things rolling in Las Vegas. If they are successful there, the rest will come more easily. Having been disappointed before when financing fell through at the last minute, Reed is optimistic that Oxford will come through but is not counting his chickens before they are hatched.
Upon the hoped-for closing, Oxford International will fund all the pre-construction expenditures and setup costs for establishing MPTV's marketing operations, both on and off-site. Oxford International will distribute the remaining funds according to the proposed construction schedule for the Lake Tropicana Timeshare Project.
Oxford International (www.oxfordint.com) is a private investment banking firm, established in 1994, to facilitate the financing of business, commercial development and corporate investment opportunities. Partners of Oxford International include local, national and international banks. Investment banks, investment trust firms, securities firms, private investors, insurance companies, merchant banks, pension funds and national asset-based capital providers are also partners.
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MPTV's website may be accessed at laketropmptv.com
or
Contact Investor Relations:
Serena Riedel
RealSense.com
Email: MPTV@realsense.com.
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