lad Group intends to build a luxury hotel with about 3,500 rooms, private residences, retail space and a casino bearing The Plaza brand on the New Frontier site, Elad president Miki Naftali said in a statement. Opening for the 13.9-hectare site across from the Wynn Las Vegas is targeted for 2011.
Billionaire Phil Ruffin, the current owner of the 984-room New Frontier, said the group would pay a little more than us$ 1.2 billion for the property and demolish it early next year. Ruffin bought the cowboy-themed hotel that features a mechanical bull and bikini mud wrestling in 1998 for us$ 165 million.
The site also is across from where Wynn Resorts is building the us$ 2.1 billion Encore casino resort, which is set to open in 2009, and it’s south of Boyd Gaming Corp.’s planned us$ 4.4 billion Echelon complex, which is scheduled for a 2010 opening.
The deal does not include the 2.8 hectares 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.
In March, Ruffin said negotiations with Elad appeared to be falling apart, but he said he reached an agreement at a recent meeting in New York with its owner, Israeli billionaire Yitzhak Tshuva. Several days ago, Elad put us$ 100 million in escrow to seal the deal, he said.
Ruffin, who was ranked 717th on Forbes’ global billionaires list with an estimated net worth of us$ 1.4 billion, said his net worth will nearly double after the sale. His Ruffin Companies is a privately owned casino, property, trucking and hotel company based in Wichita, Kansas.
The purchase price, at about us$ 35 million per 0.40 hectares, raises the bar for land values on the Strip, Deutsche Bank analyst Bill Lerner said. Last month casino operator MGM Mirage Inc. said it would pay about $17 million per acre for 34 acres of undeveloped land north of its Circus Circus casino.
"We believe this has profound implications on valuations for Las Vegas operators with significant land holdings," Lerner said in a research note.
The Plaza Hotel in New York, bought by Elad in 2004 for us$ 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. The company said it hopes to replicate its upscale style and level of service in Las Vegas, a spokesman said.
Naftali said the company plans to bring The Plaza brand to other cities, including Los Angeles, San Francisco, Washington, D.C., Boston, London, Paris, Rome, Tokyo and Shanghai.