Sorry guys, I'm sick and haven't gotten this posted until now.
Here's the low-down:
Frontier has sold and it is likely a Plaza hotel is going in its place.
Categories: Business of Gaming, Casino Design, Las Vegas Strip
Hey Hunter, sorry you're under the weather.
If I did this right, the following link will take non-subscribers to the WSJ story for the next seven days. The RJ covered it, but I found the WSJ's chart of major Strip projects interesting. Elad makes MGM's land cost for CityCenter cheap. Wynn also has lucked out on land. Who ever thought the New Frontier would be the site of a $5 Billion project? Unreal.
Also, since we discussed this back in March, here's the link to that. Leonard Stern did break the story on March 19. OK, Leonard, what's the next big story (non-Wynn)?
Wow this is exciting! I am curious as to what they will do with that land, probably give Wynn a run for his money. Leonard was on the money, I'm anxiously awaiting the next breakthrough.
Get well soon, Hunter. This is getting some play in the NY media (I just did an interview with the Post about it), and they are wondering if the Plaza "theme" can transition to the Strip (at least that's what I was asked). Does anyone have any thoughts on that? I think the basic idea of an ultra high-end property is nothing new here, but it raises interesting questions about outside names like Fontainebleau, Mandarin Oriental, Mondrian, and Delano appearing on the Strip in the next five years. Will this make the "homegrown brands" look low-rent?
Also, I find it interesting that Echelon Place is about 2.5 times bigger (87 vs. 35 acres) with substantially the same components (minus the residences) but this will cost only about $200 K less ($5 b total price minus $1.2 billion for land). Is this going to be 2.5 times the hotel/resort as Echelon, or is it just that much more expensive to build as of May 2007?
The Plaza "theme" is working well in downtown Las Vegas...
Seriously, wonder if they need to buy the Plaza name/brand off of Tamares to use it in Nevada? Not that that would be a tough sell, seems like Tamares is in the mood to sell anything they can get cash for.
Dave, I keep wondering how high-end Vegas can go, and I'm always wrong. However, Elad is selling hotel condo suites at the Plaza in Manhattan for $2-$6 Million for less than 1,300 sq ft. Will that translate to the Strip? It will to a certain extent, but developers like MGM probably have a leg up because they know the gaming market and the high roller market. Same with Fontainebleau because Glen Schaeffer brings that expertise. I'm not so sure about Morgans Hotels in Echelon Place.
Also, if Elad is spending $5 Billion, what are they going to charge for their 3,500 rooms, $600 a night? How high can it go? Who will operate Elad's casino? I know Fairmont Hotels will manage the NYC Plaza.
The Las Vegas Strip is not Manhattan, the world capital of finance. I know there are lots of hedge fund billionaires, but will they all want places in Vegas overlooking hordes of tourists walking down the Strip carrying their 2-foot tall margaritas? Oh, wait a minute, those bread and butter, mainstay tourists won't be able to afford Vegas any more.
Sorry. I'm overly cynical tonight.
The NY Plaza doesn't have a casino, so the Vegas rooms won't have to be as high priced to break even. Seems they are going to have to partner with somebody with gaming and player development experience, though. Hey, I heard that Larry Woolf and his Navagante Group are available, they were even managing the "Plaza" downtown until the recent split with Tamaras. LOL
All I can say, is THANK YOU GOD!!! I can't think of a single hotel in LV more deserving to be imploded. I mean don't get me wrong, Trop, IP, Circus Circus, Riviera, and Sahara all come in a close second, but Frontier is the single worst hotel in town, and it has one of the best locations. I can't wait to see that hotel come crashing down!
Detroit--yeah, that's been the question for a while. Upscale works if you can either get existing visitors to "upgrade" or appeal to people who haven't been coming here. I'm guessing that they did some intense market research before deciding that the market can absorb a $5 billion, 3500 room (+ 300 "residence") property.
The Harrah's 2.0 (my neologism for the post-buyout HET) plans for the Strip are the X factor. If they go ahead with their own version of City Center, or something more ambitious, bargain hunters will be hard pressed to stay on the Strip, though the coming 10,000-room Tropicana will, according to Columbia Sussex, not be too pricey. The question is, can Harrah's fill super-highend rooms, given that their historic strength has been middle-income players? Caesars Palace may be a bellwether.
If Harrah's does nothing major, the Strip dynamics will be curious, with tons of investment at the north and south ends, but not so much in the middle.
And I've read that Elad wants to apply for a gaming license, which may mean they intend to run the casino in-house.
I'm most intriuged by the stress on the convention center: Fontainebleau and especially Echelon place seem to be counting on convention space as a big draw and, with the LVCC expanding, you've got to wonder how much is too much. Or maybe, as Morris Lapidus said, too much is never enough.
I just read in the NY Daily News that an apartment at the Plaza in NY has just sold for $50 million, a new record price for a NY apartment.
Dave, even if El Ad farms out the casino management, the owners still have to apply for a gaming license. And I was just kidding about Larry Woolf, he's going over to the Sahara with the new owners. Anyway, you might be right and if El Ad wants to manage the casino themselves, with their deep pockets they probably won't have any problem recruiting experienced gaming executives. But has El Ad ever run a casino before?
Steve Wynn talks about Elad, the North Strip and the value of his golf course land:
This should get a few smiles here, from today's paper:
The New York-based public relations firm for New Frontier buyer Elad Group needs to do its homework on Las Vegas.
Linden, Alschuler & Kaplan's news release announcing Elad's $1.2 billion purchase of the New Frontier site touted the location "directly across from the Wynn Las Vegas and Wynn's newest development, the Anchor."
Wynn's newest development is actually the $2.1 billion Encore.
According to some pundits, the Anchor is what Steve Wynn hung around his neck after dealers at Wynn Las Vegas overwhelmingly voted in favor of union representation a week ago.
mike_ch: This is way too hilarious to resist, with Steve's reputation going down the drain faster than Drano, he should really give serious consideration in changing the name from "ENCORE" to "ANCHOR". Can you say sinking ship. :-)
I stayed at the Plaza in NYC many years ago. I was in a HUGE interior room with one bed and two full bathrooms. The ceilings were at least 15' and it felt like you could play football in this room it was so big. I assume it was sort of leftover space that didn't fit into a redesign or something and so they just turned it into a big bedroom. I was surprised at the size in a nyc hotel. The rest of the hotel was very nice though a bit overstyled for my tastes. I have never been a big fan of french interior design. If he copies the design style I am sure that it will fit right into the Trumpish neighboorhood. I am glad to see that the North Strip is getting a good makeover. I won't even recognize the area in 10 years. Any chance that the Strat gets in on the rebuilding and gets blown up too????
"Tamares Las Vegas Properties filed a complaint Thursday in Clark County District Court to block Elad Group of New York from using the Plaza name in Sin City."
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