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New Frontier Development Delayed Again

LAS VEGAS – Feb. 5, 2002 -- Fears of potential Wall Street investors have forced New Frontier owner Phil Ruffin to again delay his plans to redevelop the aging Strip hotel-casino into a $1 billion, 2,500-room San Francisco-themed megaresort.

Financiers are reluctant to help pay for new Strip properties, with many fearing that a repeat of the Sept. 11 terror attacks would throw the city's tourism industry into deeper turmoil, Ruffin said Monday.

The Kansan, who ranks No. 364 on Forbes magazine's most recent list of the 400 wealthiest Americans with an estimated net worth of $700 million, said that he met last month with New York financial advisers to check on the availability of money for megaresort construction.

"The gaming and hotel capital markets just haven't opened up yet," said Ruffin.

But they could, Ruffin noted, once Desert Inn owner Steve Wynn finalizes the financing for his planned $1.63 billion Le Reve project at the southwest corner of the Desert Inn site.

"Once Steve Wynn has arranged his (financing), we're next in line," Ruffin said. "It is to our advantage that it happens for him. We think we'll be next, I'm really positive about it.

"The lenders are comfortable with the idea of additional Strip development, but they're concerned about what might happen if the other shoe drops and there's another terrorist attack."

Ruffin plans to renew his financing effort in about three months.

Throughout the past year Wynn and his aides have said on several occasions that they expected to soon have financing in place for the water-themed project. In January, the Bellagio and Mirage developer said financing will be arranged by the end of February, with construction to begin about six weeks later. He refused, at the time, to explain the source of the money but promised it would be new to Nevada megaresort development.

Wynn failed to return a Monday phone message seeking comment about Ruffin's comments.

Ruffin made his fortune with a chain of self-serve gas stations in Kansas and Oklahoma in the late 1960s and early '70s, and later a hand-truck manufacturing plant in Wichita.

He purchased the New Frontier in 1998 for $167 million, ending Culinary Local 226's bitter six-year strike against the property's then-owners, the Elardi family. Three years ago he negotiated with Park Place Entertainment executives to purchase the Las Vegas Hilton, a potential deal that eventually fell apart. He also owns a Kansas dog track and a casino in the Bahamas.

Ruffin announced in January 2000 his plans to implode the 986-room New Frontier and replace it with a San Francisco-themed property. He cited high interest rates as his reason for postponing the project later that year.

"If it's not one thing, it's another," he said Monday. "We just need to hope that the world situation calms down and there are no more terrorist attacks."

Henderson real estate developer Mark Advent, a codeveloper of the New York-New York megaresort, has since sued Ruffin, claiming that he actually developed the San Francisco-themed concept and shared it with the New Frontier owner.

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