Elad 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 34.5-acre 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 $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 $165 million.

The site also is across from where Wynn Resorts Ltd. is building the $2.1 billion Encore casino resort, which is set to open in 2009, and it's south of Boyd Gaming Corp.'s planned $4.4 billion Echelon complex, which is 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.

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 $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 $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, Kan.

The purchase price, at about $35 million an acre, 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. "Notably, this transaction makes MGM's most recent purchase appear attractive, and makes our current valuations for the operators' (particularly Wynn, MGM and Boyd) land seem conservative."

The Plaza Hotel in New York, bought 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.

The company said it hopes to replicate the Plaza's upscale style and level of service in Las Vegas, a spokesman said.

"The character of The Plaza will be reflected in an imaginative and appropriate way," spokesman Lloyd Kaplan said. "There is an opportunity to create a successful development at the very highest end of the market."

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.

Jeff Simpson on why Steve Wynn is happy to have a new neighbor on the Strip
I talked to an upbeat Steve Wynn on Friday afternoon, not long after he'd joined New Frontier owner Phil Ruffin for lunch.
Wynn had a few reasons for feeling good about Ruffin's $1.2 billion sale of the New Frontier and its 35-acre site to Israeli real estate baron Yitzhak Tshuva.
One, Wynn likes Ruffin, and admires the deal he made, getting more than $34 million per acre for the site directly across Las Vegas Boulevard from Wynn Las Vegas and Encore.
"I think Phil played his hand at the New Frontier as well as he could have," Wynn said. "It was a masterful move."
Two, Wynn thinks the deal and the $5 billion resort planned by Tshuva makes it even more clear that the North Strip has done more than improve its former downscale image.
The North Strip won't be just as good as the more intensively developed stretch farther south - it will be better, he said.
"This is a great lift for the neighborhood. It eliminates an eyesore. And look at the neighborhood, from Barney's (the department store being built at Palazzo), to Wynn and Encore, now the New Frontier development, the Stardust (Echelon) development," Wynn said.

"Everything is new. Big rooms. With the exception of (MGM Mirage's) CityCenter, everything down there is old buildings, small rooms. No one's talking about tearing those places down, so it's going to stay that way for a while. No one's talking about tearing down Harrah's, the Flamingo, Caesars Palace. Up here, this is where it's at."
And three, Wynn is pleased by the price Tshuva paid to move into the high-rent district between Fashion Show mall, the Trump International Hotel & Towers, Wynn, Encore and Echelon.

And why wouldn't he be happy? Wynn paid $270 million for the 218-acre Desert Inn site in 2000, and later picked up additional property underneath the homes in Desert Inn Estates, the site of the Las Vegas Chamber of Commerce building and apartments on the south side of Sands Avenue.
Wynn has already used about 85 acres, and the Wynn Las Vegas Golf Club land and the additional property he purchased totals about 160 acres.

At $34 million per acre, that land bank would be worth a staggering $5.4 billion.
Wynn said top executives from Tshuva's Elad Properties were staying at his hotel. Elad plans to use New York's Plaza Hotel, which it owns, as inspiration for its Las Vegas resort, and Wynn said he looks forward to looking at the company's plans.

One thing I've been wondering when I check out the big projects being built at CityCenter, Palazzo and Encore is: How is Palazzo going to be ready to open by the end of the year?
Owner Las Vegas Sands' Web site - and its public announcements - all say Palazzo will open in 2007, but the project isn't topped off yet. By contrast, Wynn's Encore is slated to top off in November and open a year later.
In Business Las Vegas real estate reporter Brian Wargo recently interviewed Dan Sheridan, the Las Vegas boss of General Growth Properties, which owns and operates Fashion Show, Boulevard and Meadows malls as well as the Grand Canal Shoppes at the Venetian.

General Growth also has a deal to buy the retail operation at Palazzo after it opens. In his Q&A in the May 18-24 issue of In Business, Sheridan told Wargo that Palazzo's retail will open early in 2008.
Hopefully Palazzo will avoid the stumbles the Venetian suffered from when it opened in May 1999 with less than 400 available hotel rooms and a bunch of unopened restaurants and stores. Of course, Las Vegas Sands can easily afford a soft opening, and even that slow start really didn't matter, as Venetian quickly turned into a money-making machine.

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