Two Way Hard Three | Las Vegas Casino & Design Blog

January 6, 2009

UPDATED: Elad Asking Adelson For Help?

Posted by Hunter

This is sort of a bizarre story... It claims that Elad, the company that purchased the New Frontier and plans to build The Plaza there someday, is supposedly asking Las Vegas Sands for financial help.

Does that make any sense to anyone? LVS has had more than their share of financial problems recently... what sort of help could they possibly offer?

Update: More from Bill Lerner via Steve Friess:


Read archived comments (16 so far)
January 6, 2009 9:36 AM Posted by chuckmonster

Flotsam + Jetsam = Plazalazzo

January 6, 2009 10:21 AM Posted by Brian Fey

Yeah I saw this earlier today. If anything, Ask Wynn to be a partner not LVS. Let Wynn design, run and manage the hotel. LVS is a train wreck, they have their hands full already, but they don't seem to realize that. We know Wynn don't like partners, but he has done it before.

January 6, 2009 10:34 AM Posted by Mark D

Seems like an admission from Elad that they don't have a clue what they are doing. Give it a little more time and Wynn will be able to pick up the land for half the price Elad paid by just paying off the GS loan.

January 6, 2009 10:57 AM Posted by Jeff in OKC

The 2 biggest angles I see pointing toward Adelson are
1. I sense that Adelson is the biggest supporter of Israel in Las Vegas, and maybe the U.S., which could make him the most suitable figure from an Israeli perspective.
2. Does Adelson still have more cash, personally? I have nothing to back this up, but I get the feeling that Adelson can always scrape up a little more money, if he has to.
Other than that, the story seems wacky, to me.

January 6, 2009 12:21 PM Posted by mike_ch

Look at it this way: If you are a businessman from Israel, Sheldon Adelson is a known quantity. The guy is not only a big supporter in political issues as Jeff mentioned, but also owns some Israeli media.

Contrast that with Wynn, who is basically Some Las Vegas Guy. And one who has been critical, borderline on hostile toward their plans from the very beginning.

January 6, 2009 1:24 PM Posted by Doug

I have to agree with Mike_ch on this. And if Adelson can help Elad get going on their project - great.

I'm not sure about the design of the 'new Plaza', but I don't think Las Vegas needs another 'Asian decorated baccarat hotel' either. - After looking at the pictures of the Sinatra restaurant I was thinking if they took down the pictures of Frank and all memorabilia and just used the colors and design for an ENTIRE 5 STAR HOTEL you would have what one poster called "1960's Palm Springs - but new". And I think this is what Las Vegas needs; just a first class desert hotel that looks like it belongs in the desert.

January 6, 2009 1:29 PM Posted by Hunter

Well, Wynn has said multiple times that the Elad guys stay at WLV when they come out, not MEGACENTER(tm)... so it's clear they are at least acquainted.

Business news travels everywhere and I would assume these guys are spending just as much time in New York City as Tel Aviv these days. I don't know if I would give Adelson much of an edge just because of his Israel connection.

January 6, 2009 3:54 PM Posted by John H.

To be fair, it's not like Wynn isn't associated with the Jewish community. If I remember correctly, I once heard that one of his daughters is married to a prominent Las Vegas-area rabbi or other influential member of the area's Jewish community. That isn't nearly the level of connection that Adelson has with Israel, but it would serve to indicate that Wynn wouldn't exactly be considered an unknown "gentile" if he were to craft a deal with ELAD.

More to the point, I can't see any benefit--in the short term, of course--for either Wynn or LVS. Wynn, as has been stated, has more than enough land to "play" with, while LVS is fighting tooth and nail to save themselves from the impending precipice of financial destitution. It would be, then, counter-intuitive for either of these companies to purchase that land. In fact, it would be almost impossible to see any case in which one of the industry's current players could benefit, in this short-term economic downturn, from this deal. This doesn't mean that, long term, the deal wouldn't benefit LVS or Wynn. It simply means that, unless either company could get that land for a song, I can't see this deal being beneficial for any of the players involved.

Personally, though, I continue to ask myself if Wynn would really want the land. Would he want an almost complete monopoly on that area of the city? Harrah's and MGM have their respective monopolies, and although it is due to their massive debt load, they truly seem to be struggling to keep hold of what they have amassed. Would Wynn benefit more by finding a way to buy land further south on the Strip? In a sense, would he benefit by playing out the scenario that he used with the Bellagio? Or would he in fact benefit from having that monopoly on the North Strip?

January 6, 2009 4:29 PM Posted by Brian Fey

Wynn paid less than $1.5 million an acre just 8 years ago for the D.I. I don't even know if he's be interested in buying the Frontier land for half what they paid. I don't see Wynn paying 15-17 Million an acre. Not in this economy, not with their debt, no with the 53 acres they need to develop first in Macau, and they still have about 150 acres on the golf course they can build out. Never say never, this is Vegas, and Steve Wynn has certainly surprised me more than once. But I don't see him doing that. Steve is famous for stealing land, he stole DI, and he stole the Dunes. He also stole the CP land he owned. I'd love to see him get the land, and do something with it, but with what Elad has in the land, I just don't see how they could ever put a deal together.

January 6, 2009 8:10 PM Posted by Anthony

Elad's Plaza can't get off the ground and now someone wants to build the largest hotel west of Hardrock

January 6, 2009 9:22 PM Posted by Mark D

LVS denies the report, but in the second paragraph of the article it says "Yitzhak Tshuva and Nochi Dankner plan to ask Adelson to become a partner in their project...", meaning they haven't asked him yet. But on the other hand, Wynn has already partnered with them by paying to take down the old marquee and parking some trees over there, so they are already talking to Wynn.

January 7, 2009 12:42 PM Posted by Jeff Simpson

I agree with Brian. No way Wynn buys New Frontier site, even for half what Elad paid.

January 10, 2009 11:17 PM Posted by Mark D

Maybe so, Brian and Jeff, but in an article, that Detroit1051 just linked to in another thread, a British reporter says that over dinner in Sinatra, Wynn "boasted that he will buy out two Israeli entrepreneurs whose plans to build a replica of the Plaza hotel across the street are mired in debt." “I told them, ‘You made a mistake. You’ve lost $800m. Walk away.’” I actually think if he waits it out a little longer the bank will be happy to sell it to him for less than the $600 million left on the loan, because right now the bank is getting paid nothing from Elad. And just to speculate even further, Wynn could also probably pick up Fashion Show Mall for a song too, if GGP goes into bankruptcy. Then he could get rid of that "cloud" thing out front that he hates. Just image what Wynn could do if he controlled both sides of the Strip for that entire stretch from Spring Mountain Road to Desert Inn Road. I think it would be a much more successful development than building a bunch of out-of-the-way stuff hidden in the back on the golf course land. He could keep the golf course.

January 11, 2009 1:26 AM Posted by Jeff Simpson

Mark D makes a good point and one I don't disagree with. Wynn might be interested in buying the New Frontier site; I just don't see him buying it for half or more of what Elad paid for it (half or more of $1.3 billion is $650 million-plus). Now if he could buy it for, say, $500 million or less, maybe he would be interested.
It certainly would make sense for Elad to drum up some kind of competition between those with cash (Wynn and maybe Sheldon Adelson or even Boyd). All would have incentive: Developable property across the boulevard would allow Wynn to keep his golf club indefinitely, Adelson's company has almost exhausted its Las Vegas Strip land and Boyd owns the land directly north of the site and might want to add to its land bank.
I recently talked with Wynn about what he might want to use his cash stockpile for. While some of his thoughts about what may be available are off the record, I can say he plans to keep his options open. He's always been an exceptionally smart buyer of land and there's no reason to believe that's changed.

January 11, 2009 6:03 AM Posted by detroit1051

Mark and Jeff have raised some great thoughts. The west side of the Strip between DI and Spring Mountain is only broken up by Trump. I'm not sure Wynn would want what amounts to a generic shopping center, Fashion Show Mall, but if the price is right, it might be a smart move. Some retail analysts say we have twice the retail outlets in this country that can be supported even in normal economic times. Steve could take advantage of GGP's problems and then modify/shrink the mall as he sees fit.
That would be amazing, land all the way from Paradise to Industrial with The Strip right in the middle of it all. Since Steve and I are the same age, I have to say he is young enough to wait 10-15 years to change the purpose of all that land west of the Strip.

January 11, 2009 6:27 AM Posted by Brian Fey

I'm just starting to read this article, I'm only into the first paragraph and I already see some glaring major errors. I guess Wynn could have a G550 on order, but some would argue that is a step down from the BBJ they currently have, (Wynn Resorts, has multiple jets currently, including a G5 i, think.) but the price they list is so far from reality. You cannot begin to touch a new or used G550 for $10 Million, They are closer in the 40's depending on features, and how they are finished out. I hate to be a "know it all", but if you are going to write a article with major speculation, or new rumors that seem somewhat far fetched, I hope they get their facts and numbers straight, or I really question the whole article. I'll get off my soap-box now, and read the article. :)