Locally backed
casino to go public

Hotelier Richard Kelley
is a big investor in the project
in Mesquite, Nev.

By Russ Lynch
Star-Bulletin

A Nevada casino-hotel development company partly financed by Hawaii hotelier Richard Kelley plans to raise $10 million through an initial public offering this month.

The company, NevStar Gaming & Entertainment Corp., is developing a 25-acre property in Mesquite, Nev., on the Arizona border about 80 miles from Las Vegas, according to a preliminary prospectus for the stock issue.

Kelley, chairman of Outrigger Enterprises Inc., the family-owned parent of Outrigger Hotels & Resorts and related companies, has a personal investment of $3.5 million in the project, as a 50-50 partner with the friend who introduced him to the project, Richard Tam.

They also picked up some shares when another investor withdrew, so Kelley will end up with 6.7 percent of the company's common stock after the stock issue, the prospectus says.

Tam, originally from Honolulu, lives in Nevada and is an investor and real estate developer who also owns a thoroughbred horse breeding and racing business. He will end up with a 17 percent holding in NevStar.

Citing Securities & Exchange Commission rules on initial public offerings, Kelley today said he could not comment.

Work has started on the project, which will include 210 hotel rooms and suites, 12,000 square feet of casino space, restaurants, a cocktail lounge, a swimming pool and spa, and some shops.

The project, called the Mesquite Star, will have a casual "old west" theme and will cater to middle income customers, according to the prospectus. It expects to get business from traffic on Interstate 15, the highway that passes through Mesquite. It is expected to open by mid-1998.

The initial offering of 1.9 million shares at $5.50 each is being handled by a New York investment firm, H.J. Meyers & Co., which said it expects the shares to be offered in a week or 10 days.