The closing of the resort is meant expedite the sale as well as the redevelopment of the property. Had the buyer wanted to continue operating the property, the transaction would have been subject to gaming licensing, which can take a year or more, Atwell says. The shuttering of the aging casino-hotel also supports the buyer's plans to scrape the site next year and have a new resort up and running by 2011.
Wichita billionaire Phil Ruffin is selling the New Frontier property to Israeli billionaire Yitzhak Tshuva's New York City-based Elad Group, which plans to invest an additional $3.5 billion developing a mixed-use casino-resort on the site. The new development will try to recreate New York's City's Fifth Avenue on the Las Vegas Strip, Atwell says.
The development will be branded after New York City's Plaza Hotel, which Elad acquired in 2004. General plans for the site include a six-diamond hotel, private residences, the Plaza Retail Collection and, of course, a casino, destination restaurants and convention space.
Ruffin acquired the acreage in the late 1990s for less than $200 million, according to published reports. Ruffin had been planning a Swiss-themed, Montreaux-brand resort for the site, for which he says he had lined up $2.7 billion in financing. His reasons for selling reportedly include the rising cost of construction and the relatively low 15% federal tax on capital gains.
The purchase price translates to a per-acre price of more than $34 million, double what MGM Mirage recently paid for a similarly-sized chunk of land one mile further north on Las Vegas Boulevard at Sahara Avenue. "This will be a new record price for Strip property...," says Atwell, whose company is called Resort Properties of America.
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