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HENDERSON, NV-Since Hilton Hotels Corp. announced plans 10 months ago for a 200-unit timeshare development and a 50-unit fractional property at the 3,592-acre Lake Las Vegas Resort here, the housing market has gone from bad to worse and the resort’s developer has sold the resort’s assets to a group of creditors after defaulting on a $540-million loan. Hilton isn’t saying whether the events have affected its development timeline for the project, but it appears something has slowed down plans for the project.

In March, shortly after paying $35 million for two parcels totaling 17.3 acres on the north side of the lake overlooking the 17th and 18th holes of the Reflection Bay golf course, Hilton announced that its timeshare division was in the design phase for the project. The company said it expected to break ground early this year and open in the third quarter of 2009.

A source at the City of Henderson tells GlobeSt.com that no applications have been filed for any type of site work related to the project since Hilton filed its concept plan nearly one year ago. A Hilton spokesperson says the company’s initial announcement coincided with Hilton’s acquisition of the property, that the company “has not disclosed any additional information since that time,” and that it is not commenting further at this time.

For nearly the past decade, the master developer of Lake Las Vegas has been Transcontinental Corp. of Santa Barbara, CA, which is run by Ron Boeddeker, its president and chairman. This past fall, the company defaulted on a $540-million loan after residential builders failed to make option payments on 400 acres of resort land. Earlier this month, on behalf of a group of creditors, a subsidiary of the Atalon Group–an operational restructuring firm experienced in turning around financially troubled companies–acquired the assets of 3,592-acre resort for an undisclosed price.

A source with Atalon tells GlobeSt.com that those assets include an interest in the Ritz-Carlton Hotel, the aforementioned 400 acres of undeveloped land, interest in a few shops and restaurants in Montelago Village including Comos Restaurant, and four golf courses, one of which is still being built.

Technically, Transcontinental transferred its equity interest to the creditors after failure to meet loan covenants. The Atalon Group then formed a subsidiary that includes the creditors and purchased the equity interest with a loan from Credit Suisse, according to an Atalon source.

The CEO of Atalon Group, and now the president of the Lake Las Vegas operating companies, is Frederick Chin, who prior to the sale was acting as the chief restructuring officer for Transcontinental. Prior to Atalon Group, Chin was CEO of Sagebrush Enterprises Inc., which controlled dozens of subsidiaries involved in the investment and development of residential land.

Through a spokesperson, Chin declined to discuss the acquisition price of Lake Las Vegas or his near-term plans for the asset. In a prepared statement issued earlier this month, Chin says Atalon will utilize “a disciplined approach to business planning, budgets, and controls” and that a number of key staff members will stay on.

“The Atalon Group will work with key stakeholders to maximize and preserve the value of the community’s key assets and realize its ultimate potential in light of Las Vegas’ strong overall economic prospects and today’s challenging real estate market conditions,” Chin said.

Lake Las Vegas is the 40-year-old brainchild of actor and entrepreneur J. Carlton Adair. After flying over the area one day, Adair bought the land and the water rights to develop Lake Adair. Santa Barbara-based Transcontinental Properties bought it in 1990 after Adair declared bankruptcy, according to published reports.

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