The construction of the Dream Las Vegas, the property envisioned as the new Las Vegas landmark, has come to a halt. The developer Bill Shopoff”s funding funnel run dry leaving him with short-term cashflow promises and pending liabilities toward contractors in the $ 550 million hotel-casino project.
The Dream las Vegas developer Bill Shopoff, president, and CEO of Shopoff Realty Investments told the press that construction works have fully stopped ”other than anything required for safety.” He also said that he owes around $25 million to $30 million to the construction work contractors and that the works will resume as soon as the financing terms are finalized.
Shopoff confirmed the delay and said that the owners of the property that broke ground last summer – that have been paying cash for the project so far – are currently working to secure around $400 million of the funding pipeline for the project. Shopoff continued that his group has active discussions with its lender expecting to finalize the transaction in the next few weeks.
He added that the total investment in the Dream Las Vegas resort will reach the amount between $550 million and $575 million, which is in line with the developer’s plans from the beginning of the project.
The resort broke ground on Las Vegas Boulevard just south of Russell Road in July 2022. It’s set to feature 531 guest rooms, as well as restaurants, nightlife areas, meeting, and event space, and a new pool deck to open in late 2024. The companies behind the project, Shopoff Realty Investments, and Contour said that the Dream property will rather offer a smaller, boutique-style experience to be easily distinguished in the multitude of massive hotel-casinos located in the same corridor.
Funding to be Secured:
The stoppage of funding produced the developer’s outstanding receivables towards the Dream’s lead builder, contractor McCarthy Building Companies, but Shopoff said that his group will duly settle its contractual liabilities. “They will be paid, and the project will get built,” he said and added that there have been some factors affecting the project from the beginning.
The closure of the last year’s deal with the property owners taking longer than expected, the Federal Reserve’s moves raising borrowing costs and the recent banking industry issues have been the factors adding uncertainty to market prospects. Shopoff assured that his team will secure the funding and ”get the project back on track” in two to four weeks. “Obviously people want to get paid for their work,’ he said, ‘and we want them to be paid.”
Filled with Enthusiasm:
During the Dream’s ceremonial groundbreaking last July, McCarthy Senior Vice President Ross Edwards indicated that around 1,200 construction professionals would be working on-site. He said on the occasion: “I can assure you our industry is filled with enthusiasm around the opportunity to help build a new Las Vegas landmark and will do so in a work environment that is committed to safety, and is welcoming, inclusive, and empowering to all.”
On March 10, 2023, Edwards signed a lien notice recorded by McCarthy stating that the construction company had received about $43.3 million in payments but indicated that almost $40.2 million was still due for the project at the time the notice was recorded.
A Series of Obstacles:
Before the latest funding issue, the Dream Las Vegas project faced some significant obstacles, such as a series of design changes imposed by security concerns due to Dream’s location next to the Las Vegas airport. Also, the developers discovered the next doors newly built facility in spring 2021 encroached by around eight feet on Dream’s property and the issue was settled before the court.
Finally, the Dream Hotel Group was recently acquired by Hyatt Hotels Corporation for $300 million. The corporation announced the acquisition and said it would pay the base price of $125 million, with the remaining $175 million falling due over the next six years “as properties come into the pipeline and open.” Shopoff said that no changes to the project’s name or programming will be made as a result of the Hyatt deal.
Plenty of contingencies surround the project as it moves to the milestone expected to get the funding required to drive the project forward. The developer and the contractor’s 1200 workers await the financial injection to resume construction works and bring the controversial project closer to the completion date set for late 2024.