Las Vegas Sun

March 28, 2024

Casino hotel planned for Silver Slipper site

Just days after signing a deal with Donald Trump, New Frontier owner Phil Ruffin is closing in on a joint venture to build a $750 million to $800 million casino resort project just north of the New Frontier.

And that could, in theory, could help open the door for development of Ruffin's long-discussed plans for the New Frontier site itself -- a $1 billion, San Francisco-themed casino resort.

Ruffin said this morning he has signed a letter of intent with "a big hotel company" to build the project on the site of the former Silver Slipper casino. That building was taken down in the 1980s by the previous owners of the New Frontier, the land is now a New Frontier parking lot.

Ruffin did not disclose the identity of his potential joint venture partner, saying an announcement could come within two or three weeks.

"It's looking pretty good," Ruffin said. "It's a very exciting project. It's just not a done deal yet."

Ruffin would manage the property's casino, while the partner would run the hotel, said Ruffin consultant Jack Wishna. Financing would not prove a problem for the company if a deal is finalized, Wishna said.

"It's a very large, publicly held company that wants to fly their flag in Las Vegas," Wishna said. "It's going to be something unique, something that has attraction and lure. I'm not talking about a volcano going off."

The 1,200-room to 1,500-room upscale resort would break ground in early 2003, and could open by 2005. It would be Phase 2 of a three-phase redevelopment of the New Frontier site; Phase 1 is Trump Tower Las Vegas, a $300 million, 600-foot luxury condominium tower on Fashion Show Drive. Ruffin would have a 50 percent stake in both projects.

If the new resort proceeds as planned, it would be on track to open around the same time as Le Reve, the $1.65 billion casino resort planned by Steve Wynn for the Desert Inn site. That site is directly across Las Vegas Boulevard from the New Frontier site.

Phase 3 would be "City by the Bay," the San Francisco-themed resort Ruffin has said will eventually replace the 50-year-old New Frontier. This project has been on hold for some time, as Ruffin has been unable so far to raise funds on favorable terms.

Wishna said deals with Trump and the unidentified hotelier could change that -- and open the door for City by the Bay by providing Ruffin with additional collateral, more cash flow, and synergistic projects to drive business to the site.

Ruffin, however, was cautious when discussing City by the Bay.

"The timing on that (construction of City by the Bay) may not be simultaneous, but we're still looking for the dough," Ruffin said. "We're very close to getting the money, but getting a billion dollars is not easy, especially with the bankruptcy of the Aladdin."

Gaming analyst Andrew Zarnett of Deutsche Banc Alex. Brown said Ruffin's task of raising the funds could get "slightly easier" with the two projects.

"Clearly the more development that happens on the north end of the Strip helps the prospects for the Ruffin project, because the markets will be more inclined to look at financing a project where a lot of new developments are being done," Zarnett said. "There are still issues to be worked out with equity, but it makes the location more attractive."

Larry Klatzkin, gaming analyst with Jefferies & Co., said the projects would help give Ruffin's proposal some credibility.

"It doesn't hurt," Klatzkin said. "But in this market, nothing is guaranteed."

Ground has been broken on just one new north Strip project, a timeshare project by Hilton Grand Vacations near Circus Circus. However, there are a number of potential development sites beyond Le Reve and the Ruffin projects. Sahara owner Bill Bennett has a land parcel at Sahara Avenue and Las Vegas Boulevard he's been marketing for sale; Archon Corp. owns a land parcel underneath the Wet 'n Wild water park that could be used for development; Turnberry Associates has discussed building a London-themed casino at the site of the old El Rancho; and Boyd Gaming Corp. has said it eventually wants to launch a redevelopment of the site where the Stardust now sits.

"There's going to be another wave (of development on the Strip), and there's not a lot of land for it elsewhere," Klatzkin said. "Between Mandalay (Resort Group) and MGM (MIRAGE), they've bought up all the land (further south on the Strip). Eventually that area's going to have to be the place for people to go."

If financing for City by the Bay can be finalized, it would spell the end of the New Frontier, which would be closed and imploded. But, as of yet, there are no plans to shut down the property, Ruffin said.

"(The New Frontier) does create cash flow for us," he said. "We're not going to do anything rash."

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