VEGAS, Nev. -- An Israeli-owned real estate
investment group, in what is being called the most expensive
large-site transaction on the Strip, has bought the
New Frontier and its 36 Strip acres for more than $1.2
billion, the casino's current owner, Phil Ruffin, confirmed
said El Ad Properties, which controls several landmark
New York City buildings, signed the purchase agreement
last week for the hotel-casino site.
a Wichita, Kan., businessman who paid $167 million for
the New Frontier in 1998, had been seeking an equity
partner to help finance redevelopment of the New Frontier
into a 2,750-room Swiss-themed resort.
said a $100 million deposit on the deal arrived Monday.
under contract, and that means we're doing the deal,"
Ruffin said. "We've been successful with the property,
but it got to a point where it was better to let someone
else come in and redevelop the site."
had been in negotiations with El Ad since March. An
Internet-based real estate Web site reported a deal
had been struck to sell the New Frontier to El Ad for
$1.5 billion on March 19, but Ruffin denied the reports.
and gaming sources familiar with the deal said El Ad
will close the aging Western-themed hotel-casino when
the transaction is completed in 90 days. The 984-room
New Frontier will be demolished, and El Ad will build
a replica of New York's landmark Plaza Hotel on the
Ad bought the Plaza in 2005 for $675 million and is
remodeling the renowned property, which includes converting
some units into Manhattan's highest-priced condominiums.
said the 1,000 New Frontier employees were being informed
of the sale this morning.
calls to El Ad officials, whose offices are in New York
City, were not returned late Tuesday.
its Web site, El Ad estimates its holdings in Manhattan
at more than $2.5 billion. In addition to the Plaza,
the group owns 21 Astor Place, The Grand Madison and
the O'Neill Building.
are setting records for the prices they are getting
for the condominiums at the Plaza," said John Knott,
executive vice president of the Global Gaming Group
from CB Richard Ellis, who was familiar with details
of the transaction.
said the deal with El Ad does not include the seven
acres on the backside of the New Frontier site which
hold the $1.2 billion Trump International Hotel &
Tower. Ruffin said the nongaming towers will continue
to be owned in partnership with New York billionaire
initial 1,282-unit Trump International first tower is
expected to be topped off in a May 25 ceremony and opened
sometime next year.
has already heard about the deal, and he was thrilled
to death," Ruffin said. "This is going to
be a really good deal for the towers, and it will help
them out tremendously."
and real estate analysts have estimated prime Strip
land values at between $20 million and $30 million an
acre. Recently announced transactions involving the
Sahara and land on the north end of the Strip have been
estimated at between $17 million to $23 million an acre.
New Frontier's acerage increased in value as activity
took place on the surrounding properties. Wynn Las Vegas
opened in 2005 at a cost of $2.7 billion across the
Strip on land that once housed the Desert Inn. Wynn
Resorts is building Encore, a $2.1 billion addition
to Wynn Las Vegas that is expected to open in 2009.
the north side of the Desert Inn Super Arterial, Boyd
Gaming expects to break ground next month on the $4.4
billion Echelon on the site of the Stardust, which was
imploded in March.
more than $1.2 billion, the 36 Frontier acres sold for
more than $33 million an acre, which Knott said is the
most expensive large-site transaction on the Strip.
Entertainment paid the equivalent of almost $85 million
an acre for the 4.3 acre site at the northeast corner
of the Strip and Flamingo Road that houses Bill's Gamblin'
Hall, formerly known as the Barbary Coast. Harrah's
swapped land with Boyd Gaming Corp. for the site.
was ranked 717th on Forbes' global billionaires list
in March with an estimated net worth of $1.4 billion.
He was considered the savior of the New Frontier when
he acquired the casino from the Elardi family.
property had been the site of the nation's longest ongoing
work stoppage when more than 550 employees, backed by
the Culinary Workers Union, walked off the job in September
workers spent 2,325 days on the picket line, going back
to their jobs at 12:01 a.m., Feb. 1, 1998, when Ruffin
took possession of the casino.
the years, Ruffin had floated several ideas for redeveloping
the New Frontier, the most recent being a $2 billion,
2,750-room hotel-casino called Montreux and themed after
the Swiss resort near Lake Geneva.
property originally opened in 1942 as the Hotel Last
Frontier and renamed the New Frontier in 1955. Reclusive
billionaire Howard Hughes bought the property for $14
million in 1967 and dropped "New" from the
hotel's title. The Frontier was controlled by the Summa
Corp. before it was purchased by the Elardi family.
Ruffin added the "New" back to the name.
New Frontier launched the Las Vegas career of Elvis
Presley, who played his first-ever show at the casino
on April 23, 1956. The Frontier was the site of the
final performance of Diana Ross and The Supremes on
Jan. 14, 1970.
Siegfried and Roy had a seven-year run at the Frontier
starting in 1981 in "Beyond Belief." The show
racked up 3,500 performances for more than 3 million
showgoers before the duo signed a $57.5 million deal
with casino developer Steve Wynn to perform at The Mirage.
recently, the New Frontier has been known as the home
of Gilley's Saloon and Dance Hall, which features bikini
bull riding three nights a week and live mud wrestling
twice a week.