CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Recent Articles

Gaming Guru

Arnold M. Knightly
 

Broker says fee unpaid in New Frontier deal

30 July 2007

LAS VEGAS, Nevada -- Local real estate broker David Atwell says he helped initiate the $1.2 billion sale of the New Frontier.

Now he wants to be paid.

Atwell filed a lawsuit in U.S. District Court on Monday, through his company Resort Properties of America, seeking $12 million plus damages for an unpaid buyer broker's fee.

"It's unfortunate we had to file this action," Atwell said. "We initiated this deal and are very proud of it. We will be paid our fair share either now or later."

New York-based developer Elad Properties NY and Fidelity National Title Agency of Nevada, the financial institution holding the escrow, are named as defendants.

Elad agreed to buy the New Frontier from owner Phil Ruffin in May for nearly $35 million per acre.

The development group, controlled by Israeli billionaire Yitzhak Tshuva, plans to spend $5 billion to construct a mixed-use project modeled after New York's Plaza Hotel.

The hotel-casino was closed on July 16 and is scheduled for demolition this fall.

Ruffin is not named as a defendant in the lawsuit.

The lawsuit was first filed in local district court on June 26 before Elad asked to have the case moved to the federal court, citing jurisdictional issues including the amount sought by Resort Properties.

Elad did not answer an inquiry seeking comment on the lawsuit.

The lawsuit contends Elad took spent 11 months examining prospective land purchases and partnerships, all guided by Resort Properties, before reaching an agreement for the Strip property.

"We were clearly the procuring cause," Atwell said. "Elad came to us seeking our brokerage services.

"We proceeded to work with them under a buyer-broker arrangement, exposing the Frontier availability to them."

He said that his company provided Elad with confidential information from Ruffin, arranged the principal meeting and arranged drafting of the original deal scenario.

According to the lawsuit, Resort Properties made inquiries and helped arrange meetings on the behalf of Elad starting in June 2006.

Atwell met with Elad President Miki Naftali and Elad Director of Development Victor Siguora on June 1, 2006, to discuss finding land for a Las Vegas project, according to the federal lawsuit.

Six days later, Atwell faxed the development group a list of seven possible sites, including the New Frontier, and a letter "discussing the form of representation" Resort Properties would provide, the lawsuit said.

Elad responded the same day that if Resort Properties arranged a meeting and a deal was signed, it would pay the broker 1 percent of the purchase price at closing, according to court documents.

After initially contacting Steve Wynn at Elad's request for a possible joint venture, Resort Properties contacted Ruffin on June 10, 2006, about a deal for the New Frontier.

The lawsuit claims Resort Properties arranged a June 29, 2006, meeting between Ruffin and Elad at the Plaza Hotel in New York.

Resort Properties continued to work with Elad until Oct. 24, when the developer informed the brokerage company that "it was no longer pursuing a Las Vegas project."

The lawsuit states Atwell learned of the possibility of a deal between Elad and Ruffin through a March 22 newspaper report.

The lawsuit contends Atwell was asked for the "lowest number" he would accept for the brokerage company's service; first on March 26 by Ruffin and again on May 14 by Elad.

The lawsuit states that Atwell was informed by Siguora on May 16 that Elad did not believe it owned the company a fee and would not negotiate.