Full Text
Increasing Pahrump Tourism by Growing the Western Standardbred Industry By Timothy J. Bohannon and Michael S. Hyde January 5. 2022 1 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Forward Looking Statements • Certain information set forth in this presentation contains “forward-looking information”, including “future-oriented financial information” and “financial outlook”, under applicable securities laws (collectively referred to herein as forward-looking statements). Except for statements of historical fact, the information contained herein constitutes forward-looking statements and includes, but is not limited to, the projected financial performance of the Company; (ii) completion of, and the use of proceeds from, the sale of the shares being offered hereunder; (iii) the expected development of the Company’s business, projects, and joint ventures; (iv) execution of the Company’s vision and growth strategy, including with respect to future M&A activity and global growth; sources and availability of third-party financing for the Company’s projects; (vi) completion of the Company’s projects that are currently underway, in development or otherwise under consideration; (vi) renewal of the Company’s current customer, supplier and other material agreements; and (vii) future liquidity, working capital, and capital requirements. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment. • These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward- looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. • Although forward-looking statements contained in this presentation are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward- looking statements. 2 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- DISCLAIMER • This presentation is for informational purposes and does NOT represent a binding agreement. • Significant details will be required to be managed in connection with this presentation and the Managements of Nevada Standardbred Association, Inc. (“NVSA”), Western Standardbred Alliance, Inc. and Affiliates must analyze and ratify summary content with detailed considerations. • The COVID-19 Pandemic continues to evolve and may be an impact to timelines or hindrance to financial projections in this presentation.. 3 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Deck Summary: Growth of Industry and Tourism • Who are We: Two organizations focused on a common interest • About the Presenters: Tim Bohannon and Michael Hyde • The Pahrump Project Story: Racing, Training, Vet Hospital and more • Tourism Growth: Growing Tourism around 10% from October-June • Job/Business Growth: Growing the Pahrump Valley economy • Tax Revenue Growth: Growing local and state tax revenues • Viability: Challenges and Opportunities • Sustainability: Patrons, People, Horses, Community and Capital 4 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Who We Are: Two organizations focused on a common interest • Nevada Standardbred Association, Inc. (“NVSA”), a not for profit trade association: The mission of the NVSA is to grow the Standardbred Industry in Nevada through education, membership, performance, and after performance life. • Education: The NVSA supports higher education and extension in Nevada and is participating with the reboot of Equine Sciences at the University of Nevada Reno, College of Agriculture, Biotechnology and Natural Resources (“UNR-CABNR”). • Membership: NVSA’s membership includes Trainers, Caretakers, Veterinarians, Administrators, Owners, Educators and more. • Performance: The planned racing center includes a harness track and a quarter horse race track (for our collaborations with the AQHA). Additionally, based on connections, the NVSA is also collaborating with Rodeo and Show groups to add our breed in the mix of participants. • After-Performance: The NVSA is working with after care groups, breeders, trail and endurance riding, therapeutic groups • Western Standardbred Alliance, Inc. a for profit C-Corporation: The mission of the WSA is to facilitate the expansion of the Standardbred industry through funding and business incubation • Adventure Capital: Packaging equity and debt financing for projects. Managed Affiliate LLC’s expect to provide 80% profit rights to limited liability investors. • Operational Leadership and Support: Provide expertise, management, and operation support for Affiliate LLC’s • Shared Services: Provide administrative, facility management, human resources, procurement, and technology support for affiliates and partners • About Tim and Mike • Tim: President of NVSA & WSA, CPA 20+ years of financial and professional services, member of Nye County Parks and Recreation Advisory Board, involved in Standardbred industry for 30+ years. • Mike: Board Secretary of WSA, Former Teacher at Pahrump Valley High School, Former Chair of the Pahrump Parks and Recreation Advisory Board, involved in Standardbred industry for 30+ years 5 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- The Pahrump Project Story: Expanding the Standardbred industry to Nevada, with the Pahrump location being the first in the state. The Project: To build an equestrian center spotlighting racing, performance training and education, equine care, and family entertainment. • Racing Center (Phase WSA Affiliate - Harness and Quarter Horse Tracks/Grandstands, housing 280 horses. • Veterinary Hospital (Phase Partnering with Veterinarians to build to suit multiple Operating Rooms and housing 20+ clinical stalls. Sizing will be based on operations. • Manure Processing Facility: Partnering with Processor to facilitate manure management plan that also facilitates water conservation. Timely processing helps address fly and odor management. • Casino/Resort (Phase Partnering with a casino and race book provide approximately 40,000 square foot of floor space with slots, table games, and live pari-mutual racing. Patrons include tourists and horse racing aficionado's. Target rooms 192+ (if tourism is confident of a greater need, we will gladly consider). The plan is to build to suit. • Family Entertainment Center (Phases 2&3): Partnering with family entertainment groups provide area sized venue. Considering water park, batting cages/training, bowling, basketball, music, dancing, movies, restaurants, shopping, and virtual reality. • Equine Training & Education Center (Phase WSA Affiliate - Training facility to train harness racing and performance horses, housing 520+ horses. Education w/UNR-CABNR and Extension. Also includes education, meeting rooms and structures. • RV Campgrounds (Phases 1 & Partner TBA - To enable Trainer/Caretaker camping, racing aficionado’s, and seasonal stays for death valley tourists. • Housing (Dorms for Caretakers): Construction partner Double M Construction - Target need for around 96+ rooms. Expansion is likely. 6 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Pahrump Tourism Growth: Our project, at go live, will increase visitors to Pahrump by around 10% during October-June. • Tourism Growth • We expect to add 600 visiting racing aficionado’s per week from October to June that stay and play in Pahrump • We expect to add 3,000 to 5,000 visiting aficionado’s for major events • The projected increase in seasonal tourism count is 25,000. This is approximately a 10% growth over prior known reporting periods. • Pahrump Hotels and restaurants should prepare for the increased activity once the Site Development is approved. • Note: since we like to under promise and over deliver, our numbers tell us that visits can be at least 2-4 times the count above. 7 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Job/Business Growth: Our project will grow jobs and the economy of the Pahrump Valley. • Job/Business Growth (180 FTE) • Hands-On professionals (100 FTE): Vets, Vet Techs/Nurses, Trainers, Caretakers, and other Handlers • Racetrack & Grounds (20 FTE): General Manager, Business Development, Marketing, Race Office, Advanced Wagering, Maintenance, Buildings, Grounds, Construction/Engineers, Security • Specialists (20 FTE): Scientists and Lab Technicians, Human Resources, Accounting, Legal, Social Media, Insurance, Transportation, Construction and Engineering (only during construction), and Educators. Note: Educators will be shared with UNR and local certified trainers. • Hospitality (4o FTE): Ticket Writers, Food & Beverage, Entertainment, Security, Other • Upon Site Development Plan Approval: • Real estate developers should be prepared for housing growth. • Hotels/RV Campsites should prepare for the increased activity • Casino’s should prepare for increased activity • Medical services should prepare for increased patients Note: several of the FTE’s above will be Sole Proprietorships or Single Member LLC’s. Thus, the planning office will be very busy with business licensing during growth spurts of the project. 8 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- County/State Tax Revenues Growth: Our project is expected to grow local and state tax revenues Category Estimated Tax Information Construction Costs (one time) $3,410,000 $100 Million/Construction Casino Tax (annual) $3,375,000 Estimated at 60% capacity Resort Tax-Hotel and RV (annual) $372,600 Estimated at 60% capacity RacingTax (annual) $172,800 Estimated taxable handle $8.64 Million/year; 2% on Pari-mutual tax Estimated Tax Revenues (annual) $3,920,400 Estimate based on Racing, Casino/Resort Site EE, Income (annual) $9,000,000 Based on 200 FTE 9 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary • Above is based on estimated revenues for Phase 1 and 2. Further support available upon request. Spending Capacity increase (Jobs): 200 FTE @ $45K = $9 Million. Wages based on blended rate. Estimated Tourism/Pahrump Spend = 23,000 visitors @$500 = $11.5 Million into the economy Property Taxes: Allocation to property taxes based on assessments in future years • In order to be conservative with calculations, this table, intentionally, does not report all potential revenue centers of the site development ---PAGE BREAK--- Base Viability Considerations: Challenges and Opportunities • Strength - Local influence: Pahrump population is growing significantly; Pahrump needs more rooms, RV campsites, entertainment, retail, and food options; County Commissioners and Staff are supportive • Strength - Regional influence: Need for racing tracks out west to help create critical mass; Proximity with Las Vegas is a significant plus; Racing Commissioner and Gaming Control Board are supportive • Challenge: Bringing in or training Horses, Trainers, Drivers, Caretakers and Operations staff and developing Owners paths • Challenge: COVID still an impact • Opportunity: Only live regular pari-mutual Standardbred race track within 500 miles. • Opportunity: The desire for job growth in agricultural business in Nevada 10 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary ---PAGE BREAK--- Keys to Sustainability: Patrons, People, Horses, Community and Capital Patrons: Meeting the need of family entertainment and ‘horseplay’ for ongoing stability. • Require ample places to stay, eat, recreate, and tourism activities • Require attractive contests and options for horseplayers People: The key to getting things done is with well trained, inspired and committed people. • Require ample housing and staple shopping options • A combination of trained/educated and existing personnel (at similar operations e.g. Pompano Park, FL) Horses: Without the horses there will be no racing. • Racing requires 280 horses to fulfill a two-day per week 12 races per day card • A sufficient purse fund account will help attract horses/trainers Community: Without a strong community support and commitment, the project will fail. • Advisory Committee’s Support –Tourism, Regional Planning, Parks and Recreation • Commission Support Capital: Financial capability is the foundation to sustainability for land and operations. • WSA is working on a financial package for land, racing, training, and vet hospital • WSA affiliate structures provide 80% distributable net income (“DNI”) to Investors up to the recovery of the original investment, prior to distributions to WSA 11 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary Patrons People Horses Community Capital ---PAGE BREAK--- Q&A: Benefits Reminder 12 2021-2022 Nevada Standardbred Association & Western Standardbred Alliance - Confidential and Proprietary • Increased Tourism • Increased Recreational & Family Entertainment Offerings • Increased Jobs and Business Growth • Increased area Spending Capacity • Increased County Tax Revenues • Increased Education Offerings