Monaco Coach Corp. has reached an agreement in principle to buy the real estate and other assets of three proposed luxury motorcoach resort properties in Las Vegas, Nev., Indio, Calif., and Naples, Fla.
The seller is Outdoor Resorts of America (ORA), which will continue to concentrate on the development of the properties along with site management and lot sales.
The agreement calls for Monaco to lend $8.2 million for the three projects and to co-guarantee $10 million in bank debt on the Las Vegas project.
Monaco also will assume $30 million in debt on the projects, which includes a $8.2 million note payable to Monaco and the $10 million in co-guaranteed bank debt.
Completion of the transaction is subject to the signing of a definitive agreement.
The first phase of development has been completed at the Las Vegas and Indio sites. There has been no development work in Naples, and Monaco might decide to sell that property, although resort development remains under consideration.
“We firmly believe in the need for upscale resorts to provide lifestyle destinations for our growing group of recreational vehicle enthusiasts,” said John Nepute, Monaco’s president. “Our initial loan provided ORA with the resources to expand into these attractive locations.
“The primary change in our relationship with ORA is that we now become the owner of the real estate, rather than a lender on the projects,” Nepute said. “This relieves ORA of the debt pressure associated with the land and will allow them to continue their focus on development and lot sales.
“We believe the value of the developed resorts will offset our initial loan and provide the potential for increased returns beyond the scope of the original loan,” Nepute added.
Monaco will take a “one step at a time” approach to the resort development projects, said Marty Daley, Monaco’s CFO. “Initially, proceeds from lot sales will be used to pay down debt. ORA will receive management fees and will be entitled to receive a share of profits generated from lot sales once all of the developed lots are sold and debts are satisfied.”
The chairman and CEO of ORA is Robert Schoelhorn, who also is chairman and CEO of highline motorhome manufacturer Marathon Coach Corp.