Former Denver Nuggets star Nick Van Exel is known for making big shots on the basketball court.
Now, the current San Antonio Spurs guard hopes to make big bucks developing real estate.
Van Exel and 34 other current or former pro athletes have teamed up with Denver-based ProNet Capital to finance a $300 million hotel and residential development on an uninhabited island in the Turks and Caicos Islands. The 40-island chain is located southeast of the Bahamas and east of Cuba.
Founded in 2000, ProNet is a private-equity firm that works with athletes, entertainers and other high-income individuals.
The company’s roster of financiers for the island project, titled West Caicos Reserve, includes Van Exel, wide receiver Amani Toomer of the New York Giants and linebacker LaVar Arrington, who has played for the Washington Redskins.
“I’m at the point in my career where I need to be thinking about life after basketball,” said Van Exel, 34, who starred with the Nuggets from 1998 to 2002.
Athletes are faced with a host of challenges when picking investments, said Craig Jones, a Denver-based financial planner who works with about 35 professional athletes.
Jones said athletes’ salaries and signing bonuses are typically large and publicly known. Many of the people they trust – agents, lawyers, financial advisers, teammates and childhood or college friends – constantly pitch them investment ideas, some of which are risky, time consuming or even fraudulent, he said.
“You are talking about men who are in a high-risk business,” Jones said. “When you have that competitive edge, you want to roll the dice a little bit more.”
At least 78 professional football players have been bilked out of more than $42 million since 1999, according to the National Football League Players Association.
Several athletes – including former Broncos safety Steve Atwater and running back Terrell Davis – are attempting to recover a combined $15 million from an Atlanta-based hedge fund accused of defrauding investors. Current Broncos wide receiver Rod Smith also is listed in the lawsuit, filed last month in a Georgia court.
Arrington, a three-time Pro Bowl linebacker who has invested in the island project with ProNet, said he has been pitched on bad business deals.
“Anytime you find yourself where you make a large income, people have the next, best investment idea,” said Arrington, 27, who last week gave back $4.4 million to the Redskins to exit his contract. “Everything with ProNet checked out, so it was something I was comfortable with.”
ProNet’s two founders, Scott Boatman and Matt McDonald, both have a history of managing financial deals for athletes.
Boatman, 36, is an attorney and sports agent. McDonald, 35, previously ran a Denver bank’s “players’ division,” which loaned money to athletes with limited credit history but the potential for big salaries.
Development plans for the island project call for commercial and residential properties on West Caicos, a 9-square-mile, uninhabited island sanctum partially owned by the country’s government.
“We have a lot of athletes who don’t need income-producing investments now, but in a few years they will,” McDonald said.
Some of the investing athletes view the resort as a chance to learn the ins-and-outs of real-estate development, Boatman said.
“If you’ve ever seen it or experienced it, you know it’s a special place,” Arrington said of the island chain, where he was married last year. “It’s one of my crown jewel investments.”
The project will feature a luxury hotel, condos, and single-family and custom-built homes ranging in price from $2.4 million to $8 million. Empty lots start at $850,000.
The project’s centerpiece is a 125-suite Ritz-Carlton spa and resort hotel named Molasses Reef, scheduled to be completed in 2008. The Gencom Group, a privately held Miami-based investment firm, is a financial partner in the hotel project.
The development also will feature a 10-acre harbor surrounded by an 18th-century-style village with small shops and cafes.
McDonald declined to say how much each player invested in the island project, but he estimated that his clients, on average, invest 5 percent of their portfolios in private-equity deals.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
