The New Frontier is closing July 15 at midnight, allowing the group buying the property to advance its plans to redevelop the site.

Elad Group, which is paying $1.2 billion for the site, announced it plans to spend at least $5 billion to build a replica of the famous Plaza Hotel in New York. Recent reports say the cost of the redevelopment would be closer to $6 billion to $8 billion, and that Elad is looking to IDB Development to help finance the project.

Elad is reportedly offering IDB, Israel’s largest investment company, a 50-50 deal.

Deutsche Bank gaming analyst Bill Lerner says the plans for the New Frontier site appear to have expanded, but the developers will likely attempt to recoup some of their investment through the sales of residential and retail components.

He estimated that Elad is getting up to $6,000 a square foot for some of its New York condominiums. In Las Vegas, high-end condo units like those at CityCenter are going for about $2,000 a square foot.

“I’m not sure what their expectations are in Las Vegas, but we’ve seen what the Elad guys are doing in New York,” Lerner said. “The scope of their development has changed and it seems like there might be more in the pipeline than they have previously announced. The assumption is they would help bring down the development costs through the residential or retail sales.”

By Greg Jones

Greg Jones is managing editor of Casino Connection Nevada, as well as associate editor of Global Gaming Business magazine.

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