Lakes to develop Shark club

Aug 13, 2002 12:09 PM

The former Shark Club on Harmon Avenue just off the Strip will be developed as a luxury high-rise timeshare. A joint venture of Lyle Berman’s Lakes Entertainment, Inc. and Diamond Resorts, LLC, a Nevada limited liability company and experienced time-share developer, the project is called "the Chateau," with construction scheduled to begin in 2004.

The upscale project will be built on the Shark Club’s 3.5 acre site currently owned by Lakes. The timeshare will include a 33-story, four-tower, 850-unit complex, estimated at $240 million. The completion of the first tower is scheduled for 2005.

The joint venture would require Diamond to perform sales, marketing and administrative services including services as the manager. Lakes would contribute the relevant portion of the Shark Club parcel, valued at $16 million, after Diamond has obtained a financing commitment for a construction loan sufficient to fund at least the first phase.

The terms of the agreement also provide for the repayment to Lakes of its contribution of property in cash based on the joint venture’s cash flow and time-share unit sales. Diamond and Lakes will also each be required to make an initial working capital contribution of $250,000. It is contemplated that Lakes will be required to make no other material contributions of cash or property to the project.