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Elad Group to buy New Frontier in Las Vegas

May 17, 2007|From the Associated Press

LAS VEGAS — The owner of New York's Plaza hotel announced plans Wednesday to buy the New Frontier hotel-casino on the Las Vegas Strip and replace it with a $5-billion multiuse complex.

Elad Group intends to build a luxury hotel with about 3,500 rooms, private residences, retail space and a casino bearing the Plaza brand, said Miki Naftali, Elad's president. The complex is projected to open in 2011.

Naftali called the 34.5-acre site across Las Vegas Boulevard from the Wynn hotel-casino "the last available prime parcel on the Las Vegas Strip."

Billionaire Phil Ruffin, owner of the 984-room New Frontier, said Elad would pay about $1.2 billion for the property. Plans call for the Frontier to be demolished in early 2008. Ruffin bought the cowboy-themed New Frontier in 1998 for $165 million.

The site is near where Wynn Resorts Ltd. is building the $2.1-billion Encore resort-casino, due to open in 2009, and Boyd Gaming Corp. is planning the $4.4-billion Echelon complex, scheduled for a 2010 opening.

The deal does not include the seven acres on which Ruffin has partnered with Donald Trump to develop two 1,283-unit condominium-hotel projects. The first Trump tower is expected to be topped off later this month, and reservations are being taken on the second.

"Donald and I are delighted that this is going to happen, because it enhances our two properties to have the Plaza next to us, instead of the Frontier," Ruffin said.

The purchase price -- about $35 million an acre -- raises the bar for land values along the Strip, Deutsche Bank analyst Bill Lerner said. MGM Mirage Inc. announced last month that it would pay about $17 million per acre for 34 acres of undeveloped land north of its Circus Circus hotel-casino.

The Plaza in New York, which was acquired by Elad in 2004 for $650 million, was closed in 2005 to renovate it into a mixed-use property of condominiums, retail space and some hotel rooms. It is set to reopen in September.

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