Elardi buys land near Bellagio

Gary Thompson

Friday, May 8, 1998 | 10:18 a.m.

Former Frontier hotel-casino owner Margaret Elardi has purchased 10 acres just south of the Bellagio's main entrance on the Las Vegas Strip for $46.5 million.

Elardi bought the undeveloped parcel through her limited liability partnership, F.G. 7-11, from Dynasty Inc., a subsidiary of Goldrush Casino & Mining Corp., a company whose shares are traded on the Vancouver Stock Exchange.

Goldrush will use the proceeds to pay off about $14 million in debt, to bring its Dynasty subsidiary out of Chapter 11 bankruptcy reorganization and "to move forward into an operating mode," Goldrush spokesman Laus Abdo said.

Goldrush, which has about 18 million shares outstanding, has traded between 80 cents and $1, Canadian, on the Vancouver Stock Exchange recently. The land sale also gave Elardi's F.G. entity the option to acquire 100,000 Goldrush shares as $1 U.S. per share.

Elardi, who could not be reached for comment, has no immediate plan to sell the land but will entertain a long-term lease agreement or joint venture with a company possessing a strong balance sheet, according to a source familiar with her intentions.

Her ownership of the Frontier was marked by a long-running feud with the Culinary Union that ended only after she sold the Strip resort last year to entrepreneur Phil Ruffin.

The 10 acres sits south of Bellagio, the $1.8 billion hotel-casino being built by Mirage Resorts Inc., and near The Jockey Club, a timeshare resort recently made part of newly formed Worldstar Resorts, a privately held company funded in part by a Starwood Resorts & Hotels Worldwide Inc. affiliate.

Mirage has recently bought other Strip properties lying between Bellagio and Mirage's 50 percent-owned Monte Carlo Resort & Casino, a joint venture with Circus Circus Enterprises Inc.

Mirage paid about $95 million for Boardwalk Casino Inc., which occupies 5 acres between Tropicana and Flamingo avenues, $1.55 million for the Country Star Restaurant and about $39 million for three other parcels. Mirage said it was assembling the properties for possible future development.

The only parcels Mirage doesn't own between Monte Carlo and Bellagio are the 10-acre Elardi site, the Jockey Club and about 11.5 acres around it.

Meanwhile, Goldrush "has already identified other real-estate acquistion opportunities" in Las Vegas and elsewhere and could make an announcement within two weeks, Abdo said.

"We tend to be opportunistic and look for troubled properties. We see a lot of opportunities arising in 1999," he said.

The small company -- it has six full-time employees -- is following a strategy used by financier Carl Icahn, who acquires control of bankrupt or distressed properties by purchasing defaulted debt.

Icahn is expected to gain bankruptcy court approval to take over Stratosphere Corp. May 15 and is vying for control of Arizona Charlie's.

"The difference is that Icahn's deals have a lot more zeroes in them," Abdo said. "But eventually, we may cross the threshold and become operators of the properties we may acquire.

"Right now, we're focusing on hard assets -- the real-estate side of the deals," he said.