CLUB 36 PHASE 2 372 E TROPICANA AVE | LAS VEGAS, NV 89169 - TDZ Capital Partners
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CLUB 36
PHASE 2
372 E TROPICANA AVE | LAS VEGAS, NV 89169
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Development Project
Project has been recently modified from 222 -1, 2 and 3 bedroom units into two
phases. The project will connect to the existing Club 36 Bluegreen Las Vegas
resort however it will now be developed into a 33 unit building (Phase II) and a
177 unit building (Phase III). Phase II will consist of 33 large upscale Presidential
Units and Phase III will consist of 177 Two Bedroom Units. The total sellout for
Phase II is $159 Million and the sellout of Phase III is $402 Million for a total
sellout of $561 Million. Amenities to be developed in Phase II include a large
50,000 gallon outdoor pool.
Development Project Cost
Phase II
PROJECT $51.4 Million. This a also includes $11.3 Million of costs associated with
Phase III including Amenities and Land acquisition. $6.7 Million of these costs
will be offset by Bluegreen via reduced commissions or direct payment.
HIGHLIGHTS Phase III (Separate Investment)
$81.1 Million for an additional 177 units to start 22 months after Phase II has
begun.
Total Phase II and III Costs
$132.5 Million
TDZ C36 Investment Strategy
$7mm invested for a 60% ownership stake in Club 36 Phase II. Investors that
invest in Phase II will have the option to reinvest the distributions into the Phase
III. Total investment needed for Phase III will be $10mm. After Phase II, an
additional $12.7mm will be raised to fund Phase III. We anticipate all investors
wanting to increase their returns by 33% and elect to roll their investment.
Construction on Phase III will begin approximately 22 months following the start
of Phase II.
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TDZ Leadership Stake
$2.5mm coming from leadership staff - 25% ownership
Developer Equity Outside of TDZ Fund
Phase II - $9.4mm consisting of $3mm cash and $6.4mm of land plus personal
guarantees. In addition Bluegreen will be offsetting Phase II costs of $6.7mm from
either reduced commissions or direct payment.
Net Development Cost
PROJECT $51.4mm Phase II
HIGHLIGHTS Exit Strategy
Liquidation of inventory through the sale of timeshare intervals conducted by
(Continued) Bluegreen Vacations. Total sellout of the Phase II Inventory by Bluegreen will yield
$398mm in cash creating $47mm in free cashflow to the partners over a 12 year
period.
Total sellout of Phase III Inventory by Bluegreen will yield $888mm in cash creating
$107mm in free cashflow to the partners over a 12 year period.
Property Management
Bluegreen Resorts at sell-out
Ochoa Development and TDZ Fund Auditor
Withum
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Experienced Project Sponsorship
Ochoa Development (Slide 16)
A. Extensive experience managing construction and conversion projects
B. Currently developing over $200mm in timeshare and existing
partnership with Bluegreen
C. Completed developments of over $1B worth of assets
TDZ Fund
A. Currently developing $45mm project in Central Florida
B. Leadership team with experience managing over $200mm in timeshare
sales annually
C. Development and sellout of over $2B in timeshare projects
PROJECT
HIGHLIGHTS Risk Mitigation
• The Developer will be entering into construction contracts with the
(Continued) build-out and carry all liabilities for such. The Ledcor will be the GC
and they also were the GC on Phase I. Ledcor has also done several
other projects for Mike Ochoa including Big Bear Resort.
• Zurich American Insurance Company/Fidelity and Deposit Company
of Maryland will be underwriting a surety bond on behalf of the
construction company.
• The sponsor has received an acquisition and development loan for
$90mm however this is being revised for the two phase approach.
Western Alliance will instead provide a $30mm construction loan
commitment of Phase II and a $60mm construction loan
commitment for Phase III.
• The development of the Project into two phases reduces the project
market risk. In the event there is unforeseen downturn in the
market, the completion and sellout of Phase II will still provide a
return and profit of the investors capital.
DEVELOPMENT 5
PROJECT
OVERVIEW
TDZ Partners will purchase 60% of the Club 36 Phase II, LLC. (the
Partnership) led by Mike Ochoa, the developer. The purpose of the Club
36 Phase II LLC. is to complete the development of Phase II of Club 36
(now phase II and III) Las Vegas Resort on behalf of Bluegreen
Corporation. Bluegreen Corporation (BXG) is a multi-site real estate
Vacation Club with a corporate office in Boca Raton, Florida. Phase II of
the project will add 33 upscale Presidential condominiums consisting of 3
bedroom units. In addition, phase II of the development will incorporate a
large outdoor pool amenity. Phase III consisting of 177 Two Bedroom
units will be developed and completed in conjunction with the sellout of
Phase II.
Over a 12 year period, the Phase II Partnership will create $398mm in
revenues. Those revenues are derived from 2 areas primarily but not
exclusivity (1) Cash Sale and Receivable Draws from the sale of Condo
Intervals $194mm (2) Principal and Interest payments by consumers
But what plays the mischief originated by Bluegreen on the Partnership’s behalf $163mm. After all
with this masterly. expenses related to the project are paid the Partnership will recognize a
net cash flow of $47mm over the 12 year life of the deal. TDZ will own
60% of that $47mm cash flow.
DEVELOPMENT 6
PROJECT
OVERVIEW Further Details
As part of this strategy, Ochoa will be executing a construction line of
approximately $30mm USD for Phase II and $60mm Receivables Facility
to support Phase II sales. Mike Ochoa and his entities will be the personal
guarantor on both of these lines and TDZ Fund will not bear any liability
as it relates to such loan agreements. In exchange for committing to the
risks related to developing the raw land, Bluegreen will enter a fixed fee
Sales and Marketing contract with Ochoa ensuring that costs do not rise
above 69%. Bluegreen will be compensated a 65% sales commission with
the additional ability to earn 4% if contractual obligations are met.
Total sell-out of Phase II totaling $159mm ($35mm in additional sales for
defaults) will take place over 32 months.
Total Project sell-out for Phase II and III will be $561mm once both
phases (210 total condos) are sold to their completion. In addition to
project sell-out, Bluegreen has contracted to re-sell the default inventory.
But what plays the mischief Based on the default rates, the cash flow projections show an additional
with this masterly. $100mm of resales that take place after the original inventory sellout.
That benefit to the partnership on these resales is that there is no cost of
product since the project costs and debt have been paid for.
Consequently 31% or $31mm flows to the partnership.
TDZ Club 36 Phase II – Las Vegas, NV INVESTMENT STRATEGY 7
PROPERTY
Club 36 Phase II - New construction of 33 Presidential Two- and Three-Bedroom Timeshare Condominium Units (Phase II) and 177 One- and Two-Bedroom
units (Phase III). It will be built next to Bluegreen’s Club 36 Phase I. The buildings will connect via an enclosed walkway bridge. Phase I is a 472 unit timeshare
project that Bluegreen completed in 2007 and is currently sold out with the exception of units used for sales and marketing purposes.
This Resort is located at 372 Tropicana Ave, Las Vegas, NV. It is situated within a close proximity to the MGM Grand and City Center and other popular gaming
destinations on the Las Vegas Strip.
In addition to timeshare units, the proposed building (Phase 2) will feature a reception/front desk and lobby area, and a large outdoor pool amenity and pool
bar. Amenities and facilities currently onsite within Phase 1 include an indoor pool, outdoor sundeck, a spa, a fitness room, an Internet station, and a shopping
plaza which includes Einstein Bros. Bagels, Subway, Vegas Best Pizza, ABC Stores, Super Liquor, Tequila Restaurante, and STARBUZZ Vegas Hookah Lounge.
PRICING
This Project will be sold as deeded ownership with a points based use system operated by Bluegreen Resorts. Timeshare interest sold in resorts that are part of
the Bluegreen multi-site timeshare plan entitle the buyer to use Bluegreen resort accommodations in the plan through an annual or biennial allotment of
“vacation points,” which represent their ownership and beneficial use rights in perpetuity in the Bluegreen Vacation Club (supported by an underlying deeded
timeshare interest held in trust for the buyer). Owners in the Bluegreen Vacation Club may stay in any of Bluegreen’s club resorts, as well as club associated
resorts (not developed or managed by Bluegreen), or take advantage of an exchange program offered by a third-party worldwide vacation ownership exchange
network (RCI) of over 4,500 resorts. Using the current average price per point of 2 cents per point, the 33 units are projected to have a sellout of $159mm. In
addition, default sales from the receivable portfolio will add an additional $30mm in sales for a total Phase II sellout of $189mm.
But what plays the mischief
Total Phase II project costs are equal to $51mm. The costs to sellout are equal to 23%. The developer retainage (after paying Bluegreen sales and marketing
with this masterly.
commission) is 31%. The gross profit on the sellout to Club 36 Phase II LLC is 8% or $15mm. This is before financing income on the portfolio. The net interest
income on the notes receivable portfolio after repaying hypothecation loan is $32mm.
TDZ Club 36 – Las Vegas, NV INVESTMENT STRATEGY 8 Phase II - CAPITALIZATION SOURCES & USES SOURCES: Equity Land Purchase $6,400,000 Developer Cash Ochoa $3,000,000 Cash Equity Investor $7,000,000 Total Equity $16,400,000 32% Debt Construction Loan $35,000,000 68% TOTAL SOURCES $51,400,000 USES: Phase II Project Costs $51,400,000
INVESTMENT STRATEGY 10
TDZ Investment Return on Capital Projection – Phase II
Distributions for $7 Million Investment
Year Pref Earned Pref Paid Distributions Total Payments Cumulative Payments
1 $560,000 $0 $0.00 $0.00 $0.00
2 $560,000 $280,000 $0.00 $280,000 $280,000
3 $560,000 $560,000 $0.00 $560,000 $840,000
4 $93,333 $933,333 $10,677,998 $11,611,331 $12,451,331
5 $2,663,401 $2,663,401 $15,114,732
6 $2,607,898 $2,607,898 $17,722,630
7 $2,654,577 $2,654,577 $20,377,207
8 $2,510,494 $2,510,494 $22,887,701
9 $2,230,941 $2,230,941 $25,118,642
10 $1,726,836 $1,726,836 $26,845,477
11 $1,024,241 $1,024,241 $27,869,718
12 $431,884 $431,884 $28,301,602
13 $33,833 $33,833 $28,335,435
INVESTMENT STRATEGY 11
Investment Return on Capital Projection – Phase II
Distributions for $1 Million Investment
Year Pref Earned Pref Paid Distributions Total Payments Cumulative Payments
1 $80,000 $0.00 $0.00 $0.00 $0.00
2 $80,000 $40,000 $0.00 $40,000 $40,000
3 $80,000 $80,000 $0.00 $80,000 $120,000
4 $13,333 $133,333 $1,525,428 $1,658,762 $1,778,762
5 $380,486 $380,486 $2,159,247
6 $372,557 $372,557 $2,531,804
7 $379,225 $379,225 $2,911,030
8 $358,642 $358,642 $3,269,672
9 $318,706 $318,706 $3,588,377
10 $246,691 $246,691 $3,835,068
11 $146,320 $146,320 $3,981,388
12 $61,698 $61,698 $4,043,086
13 $4,833 $4,833 $4,047,919INVESTMENT STRATEGY 12
Investment Breakdowns
PHASE II PHASE III
Cash Invested Cash Invested
Ochoa $3,000,000 30% Ochoa $4,000,000 30%
TDZ $7,000,000 70% TDZ $10,000,000 70%
Total Cash $10,000,000 100% Total Cash $14,000,000 100%
Ownership Ownership
Ochoa 40% Ochoa 35%
TDZ 60% TDZ 65%
Returns Multiple Returns Multiple
Ochoa $18,668,068 6.2 Ochoa $37,000,000 9.3
TDZ $28,335,435 4.0 TDZ $70,000,000 7.0
IRR IRR
Ochoa 41% Ochoa 54%
TDZ 30% TDZ 46%TDZ FUND LEADERSHIP TEAM INVESTMENT STRATEGY 13
Thomas J. Del Zoppo Alex J. Hodges
Mr. Del Zoppo has 30 years of Capital Markets, Trading Mr. Hodges has served as the CSO of Capital Resorts
and Sales experience. since 2013 after a fifteen-year career with
Bluegreen Vacation Club. At Bluegreen, Alex
Thomas started his career as an analyst at Goldman oversaw different regional timeshare sales and
Sachs. He held executive roles at HSBC, CITI Bank marketing business units which annually represented
Global Markets, JP Morgan Securities, and Lazard more than$150 million in sales. Prior to
Freres. Thomas’ most recent tenure included serving as Bluegreen, Alex owned and operated Marketing
Director of Global Sales Trading for Raymond James organizations that supplied 20,000 prospects a year to
where he specialized in underperforming international developers in Branson, Missouri. Since joining
accounts to better leverage the firm’s global Capital Resorts, Alex has streamlined the company’s
platforms. sales and marketing processes, improved sales
efficiencies and helped Capital Resorts open new sales
locations and resorts.
Mr. Del Zoppo consults with numerous organizations
related to Global, Regional, and Local Economic impact of
geo-political issues, weather, currency shifts, and other
worldwide events.
Mr. Del Zoppo received his B.A. Economics degree at
Columbia University.BLUEGREEN VACATIONS OCHOA – THE DEVELOPER 14
The Club at Big Bear Village Big Bear, California
In 2015, Ochoa Development formed BBV Phase I LLC for the purpose of developing The Club at Big Bear Village located in Big Bear CA.
This project cost $9,300,000 to complete and was built over a 12 month period. It was financed with a $6,400,000 construction loan from Western Alliance
Bank and a $18,000,000 receivable hypothecation loan.
A total of $2,500,000 of equity was contributed by Ochoa Development and a $400,000 subordinated land loan from Bluegreen completed the total
capitalization.
The 20 timeshare units originally were forecast for a 24 month sellout for $40,000,000. The sales were to commence following a 12 month construction period
for a total timeframe of construction to sellout of 36 month.
Bluegreen commenced sales on July 2, 2016. Total sales for 2016 totaled $22,000,000 which was equal to an average of $4.4 million per month and
substantially ahead of the projected sales pace of $1.6 million per month.
The project reached sellout of the original 20-unit inventory in June 2017. Total sales in the first 6 months of 2017 were equal to $19,600,000 which brought
the 12 month sales total equal to $41,600,000 and 1 year ahead of the original schedule.
$3,300,000 total cash payments to date from sellout to BBV Phase I LLC. Additional payments to be generated from $15,000,000 notes receivable portfolio
with an average WAC of 16% and a WAM of 72 months. Return to date on equity is equal to 32%. Total expected net cash income from portfolio equal to
$8,200,000 after factoring in defaults and inventory recovery.
12% 18% 2X
Targeted Returns Average Net Average Net Average Leveraged
Cash-on-Cash Yields Leveraged IRR Equity Multiple
But what plays the mischief
with this masterly.
Realized Returns 68% 36% 1.36X
to Date – Year 2 of 10 Average Net Average Net Average Leveraged
Year Project Cash-on-Cash Yields Leveraged IRR Equity Multiple15
Michael Ochoa – Ochoa Development Corporation
Ochoa Development (“Ochoa”) was established in 1999 for In December 2003 Michael moved to Las Vegas and
real estate investment and development. Ochoa is financing focused his passion to the Las Vegas marketplace where he
projects using a combination of investor equity and Ochoa developed land and commercial property.
equity. Michael Ochoa is the sponsor for all debt under
construction loans. Over the past 37 years Michael has founded and managed
Ochoa Construction, Ochoa Development, Westwood
Since 1981 Michael has owned and operated his own Development and Laguna Associates. Ochoa owns,
companies. His construction company earned an develops and trades, residential, self-storage, office, skilled
exceptional track record performing numerous multi-million nursing, assisted living, memory care, time share and retail
dollar complex, high-visibility contracts for high profile strip centers.
clients such as; Disney Theme Park, Disneyland Hotel &
Resort, Richfield, Trammell Crow, Cushman Wakefield, Ochoa is the Development Partner for Plum Healthcare
Arden Realty, Hyatt, Irvine Company, Wal-Mart, Limited based in San Marcos, CA. Plum operates over 65 facilities in
Corporation, Edwards Cinemas, CBRE, Hines Properties, the Western US. Plum’s annual revenue is $850 million.
AMPCO, DivcoWest Group, Marriott, State of California, Ochoa is also a Development Partner of Bluegreen
The Millennium Group, Westfield Corporation, Prudential, Vacations which operates 67 resorts in the US and
J.P. Morgan, CitiBank and Insignia/ESG. Caribbean. Bluegreen’s annual sales are $700 million.
From 1990 to 2002 Ochoa Construction was based in the
prestigious Century Plaza Towers located in Los Angeles,
California.OCHOA – THE DEVELOPER 16
Ochoa Existing Projects
The following is a list of current Ochoa (new development ground up projects)
that Ochoa owns, manages and has financed and/or is financing:
Canyon Vista Post-Acute Las Vegas, NV 120 bed SNF / 70,000 SF 20 year lease / Plum
Coronado Heights AL & Memory Las Vegas, NV 123 bed AL / 75,000 SF 20 year lease / Plum
Sage Creek Post-Acute Las Vegas, NV 60 bed SNF / 40,000 SF 20 year lease / Plum
Centennial Post-Acute Las Vegas, NV 72 bed SNF / 46,000 SF 30 year lease / Plum
Sunrise Post-Acute Las Vegas, NV 83 bed SNF / 62,000 SF 30 year lease / Plum
Northtowne Post-Acute Reno, NV 60 bed SNF / 40,000 SF 30 year lease / Plum
Mountain View AL & Memory Reno, NV 114 bed AL / 69,000 SF 35% CD’s
Walnut Creek Post-Acute Walnut Creek, CA 59 bed / 42,000 SF 100% Drawings
Santa Rosa Post-Acute Santa Rosa, CA 59 bed / 42,000 SF 80% Drawings
Northtowne Commercial Reno, NV Limited Service Hotel / C Store Concept Design
Eastern Self Storage Henderson, NV 62,000 SF Extra Space Mgmt.
Centennial Self Storage Las Vegas, NV 76,000 SF 40% CD
Big Bear Village Phase I Big Bear Lake, CA 20 unit - 40 bed / 28,000 SF Bluegreen Timeshare
Big Bear Village Phase II Big Bear Lake, CA 59 unit - 145 bed / 67,000 SF Bluegreen Timeshare
Club 36 Phase II Las Vegas, NV 222 unit – 441 beds / 325,000 SF Bluegreen TimeshareLIQUIDATION 17
BLUEGREEN
CORPORATION
Founded in 1966, Bluegreen Vacations Unlimited, Inc., (Bluegreen
Vacations), a wholly owned subsidiary of Bluegreen Corporation, manages
and markets the Bluegreen Vacation Club ®, a flexible, points-based,
deeded vacation ownership program that connects over 212,000 owners
with 67 Club and Club Associate Resorts and access to more than 11,000
other hotels and resorts through partnerships and exchange networks.
Bluegreen Vacations Corporation (NYSE:BXG) a leader in the vacation
ownership industry and wholly owned subsidiary of BBX Capital
Corporation (NYSE:BBX), offers a portfolio of comprehensive, turnkey,
fee-based service resort management, financial services, and sales and
marketing services on behalf of third parties.
BXG uses partners throughout the US and the Caribbean to develop
products on their behalf to solve short and long term balance sheet issues
associated with marketing and sale of timeshare intervals in their Real-
estate club.
But what plays the mischief
with this masterly.
Their more than 4,500 associates are committed to not only providing the
best vacation experiences possible, but also to leaving a positive impact
on the communities in which we live and do business through advocacy
and action.LIQUIDATION 18
PROJECT DUE DILIGENCE & MILESTONES
Conceptual Design Phase January 31, 2018
Schematic Design Phase February 26, 2018
Design Development Phase April 23, 2018
Construction Doc Phase June 11, 2018
Bluegreen Pre-Sales Begin November 1, 2019
Temp Cert of Occupancy February 21, 2020
Turnover Date to Developer February 21, 2020
Sales Start Date February 24, 2020
Ready for Guest Occupancy February 24, 2020
Bluegreen Completes Sellout December 2023 (Original Inventory)19 Project Location
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Future UNLV Development
Project LocationSUBJECT PHASE 2
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EXISTING PHASE 1
EXISTING PHASE 122 Club 36 Phase 2 Project Renderings
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LEGAL 31 INVESTING IN THE TDZ FUND INVOLVES A HIGH DEGREE OF RISK AND IS SPECULATIVE. YOU SHOULD PURCHASE A MEMBERSHIP INTEREST ONLY IF YOU HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT AND CAN AFFORD A TOTAL LOSS OF YOUR INVESTMENT. NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS INVESTMENT OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PRESENTATION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON THE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS PROVIDED BY THOSE LAWS. YOU ARE NOT TO CONSTRUE THE CONTENTS OF THIS PRESENTATION OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS, WHETHER WRITTEN OR ORAL, FROM TDZ FUND OR ANY PERSON ASSOCIATED WITH THE OFFERING AS LEGAL, TAX OR INVESTMENT ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT HIS, HER OR ITS OWN PERSONAL LEGAL COUNSEL, TAX ADVISOR, AND BUSINESS ADVISOR AS TO LEGAL, TAX, ECONOMIC AND RELATED MATTERS CONCERNING THIS INVESTMENT AND ITS SUITABILITY.
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