EAST COAST STYLE, VEGAS PROPORTIONS

Thursday, Sept. 27, 2007 | 7:52 a.m.

Miki Naftali is the first developer to pay more than $1 billion for land on the Strip. And he's barely breaking a sweat.

Naftali, an Israeli-born newcomer whose company plans to build a Las Vegas version of its famed New York Plaza Hotel, will be playing in a sandbox already jam-packed with gaudy buildings, outsized egos and multibillion-dollar projects built after years of trial and error.

Although only in his mid-40s, he's already an old hand at political maneuvering as well as massive renovations and new construction projects. The concept of raising money for redevelopment by selling condos had been done before in New York and other major cities, although it had not gained traction in Las Vegas , where casino owners were toying with the idea of building condos on the Strip as part of hotel resorts.

His experience at the Plaza Hotel, purchased for $675 million in 2004 and still under renovation at a cost of several hundred million dollars, would be enough to make some Las Vegas developers run for the hills.

Unions, fearing for their jobs, threatened to block the Plaza sale and whipped up a political frenzy that captivated the media. Historians and the public balked at plans to convert the beloved icon on the edge of Central Park into a building of private residences, bemoaning the gutting of the building and scaffolding that soon covered the ornate, turreted facade.

But Naftali, backed by an Israeli billionaire with a seemingly limitless budget and a goal to restore the shopworn hotel to its former glory, was willing to compromise. He appeased unions with plans to create 130 oversized hotel rooms in addition to condos and negotiated with the city Landmarks Preservation Commission, already protecting the building's exterior, to designate eight of the hotel's interior spaces as landmarks in 2005.

Naftali's company, Elad Properties, began gutting the building in 2004, uncovering a century's worth of unused fixtures and carrying them out so as not to disrupt the opulent facade. Construction workers opened up hidden spaces to create six levels of retail space that didn't exist before and created new finishes much as they existed at the turn of the century.

Naftali was surprised by the initial backlash, which he says was "based on a complete misunderstanding that we were about to demolish the building" and was kept alive by politicians seeking to curry favor during an election year.

By contrast, redeveloping in Las Vegas typically begins quickly and painlessly, with the assistance of several tons of dynamite and a fleet of trucks to haul away the debris. The Strip can't gentrify fast enough, with its oldest properties inviting more ridicule than admiration.

Naftali had been eyeing Las Vegas for years, impressed by its newest collection of deluxe hotels and those yet to come. But he didn't jump into the fray immediately. He waited, patiently, as other resorts and condos were announced and broke ground - or died. He waited until the New Frontier sale presented itself.

"It's not that now is a better time (to build) than a few years ago," Naftali said. "It was about finding the right opportunity. It was extremely important for us to find the best available site on the Strip."

Buying a major Strip property that generates little profit but sits on a gold mine of land might be a once-in-a-lifetime opportunity - not to mention a huge ego trip - for most developers.

Yet Naftali is not driven by ego but, as he puts it, by the excitement of building and redeveloping things. With no gaming background, he has a global rather than a Las Vegas-centric view, with plans to build luxury Plaza resorts in other major cities besides Las Vegas.

Some of those properties could be redevelopments of landmark buildings, such as the Plaza Hotel, while newly constructed resorts could take after Las Vegas resorts. He's neither a bottom-feeder nor a short-timer - other developer types common to Las Vegas.

Other deals could take years to come together. Like the Las Vegas purchase, they will likely be rare opportunities involving lots of time, money and research.

In spite of its storied history hosting the rich and famous, the Plaza Hotel was a money-losing legend with an uncertain future. Early critics of Elad's plans later acknowledged that the company, with its deep pockets and experience reworking other historic buildings in New York, could help the hotel reclaim some cachet and , thus, survive for years to come.

Most recently, Elad purchased an under-construction condo tower along Wilshire Boulevard in Los Angeles that was billed as the last available site permitted for a high rise in the posh neighborhood .

Naftali says he's confident the Las Vegas resort will be spectacular and profitable even after spending $1.2 billion for the land and $5 billion or more on design and construction.

"In other major cities, you buy land based on development rights - how many square feet you can build on the land. In Las Vegas the price is still quoted per acre, which is irrelevant," he said.

"We have found the right location to develop an ultraluxury megaresort."

One challenge is bringing the Vegas version of luxury hotel suites closer to New York's.

Las Vegas resorts are built for volume rather than the kind of service and attention to detail more common to 200-room hotels than the standard 3,000-room resort on the Strip.

Naftali, who began visiting Las Vegas after the Mirage opened in 1989, knows the difference.

"It's very tough to get the same type of service in a 3,500-room hotel compared to a 300-room hotel," he said. "We think we can make it happen."