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Plaza versus Plaza

3 October 2008

LAS VEGAS, Nevada -- There's no telling yet whether developers will ever complete a $6 billion replica of the Plaza Hotel in New York on the Strip.

But closing arguments in a trial over rights to the Plaza name established if they do they won't offer prime rib dinners for $7.95 there.

A lack of big signs pushing cheap steak was just one example attorney Steve Morris used to differentiate his clients' vision for their luxury resort from the existing Plaza hotel-casino next to a downtown bus station.

"Those people will have no difficulty discriminating between the downtown Plaza and the Plaza on the Strip we intend to build," Morris said. "We don't intend to advertise our property with banners on the side of the building."

According to Morris, the proposed Plaza Hotel on the Strip will have a spa, condominiums, $800 per-night hotel rooms and a facade in the style of a French chateau.

It's unlikely to be confused with the Plaza downtown, which in addition to the steak deal advertises rooms for $59 per night and is attached to a Greyhound bus station, he said.

"Is there any reasonable chance of confusing these two properties?" Morris asked the jury.

Morris' statements were part of closing arguments on behalf of Elad Group, owners of the New York Plaza and backers of the proposed Strip hotel.

Elad is defending itself from a lawsuit by Tamares Las Vegas Properties, owners of the Plaza hotel-casino at the intersection of Main and Fremont streets.

After about three weeks of witnesses, testimony and arguments in the Clark County District Court of Judge Elizabeth Gonzalez, the case is now in a jury's hands.

They'll need to decide whether the proposal by Elad infringes on the rights of Tamares, which says the Plaza name has a distinguished history in Las Vegas dating back to 1971.

Tamares also wants the jury to award the company $29 million in lost profits because, according to attorney Dennis Kennedy, the name fight set back its efforts to renovate the downtown property by at least a year.

"That net is $29.41 million for that lost year," Kennedy said. "It is gone, you will never get it back."

Kennedy tried to establish that the Plaza name has been tied to the downtown Las Vegas property since before 1986 when the New York Plaza sought a trademark on the name, even though the Las Vegas Plaza had also been called Union Plaza and Jackie Gaughan's Plaza during that time.

The New York Plaza owners announced plans for a Las Vegas resort in 2007, after they bought the New Frontier site for $1.2 billion. Their project, however, is on hold due to the dried up credit markets.

Kennedy showed pictures from the downtown Plaza shot in 1971 to illustrate that the name has been in use in Las Vegas for decades.

One shot was of Las Vegas gambling mogul Sam Boyd dealing cards at the hotel at a blackjack table with the name Plaza on the felt. Another was a shot of the marquee in front of the property, also bearing the name Plaza.

"The evidence that is most important might be the signs on the sides of the building," Kennedy said. "It has been that way since Day One."

Kennedy also said the potential for confusion was real. As evidence, he pointed to a Web site with a picture of the proposed Plaza on the Strip that included a link where people could book rooms at the Plaza downtown.

He also paraphrased statements from Tamares executive Ken Landfield stating a new, more elaborate Plaza would overwhelm the downtown Plaza in the public consciousness.

"I can't be the old Plaza, I can't be the cheap Plaza, I can't be the bad Plaza," Kennedy said. "It is rather obvious that is going to happen."

When it was Morris' turn to speak, he tried to debunk the notion that Tamares is wedded to the Plaza name.

He referred to failed efforts by Tamares to form joint venture projects with Foxwoods Casino in Connecticut or a company called Coastal Development.

He said Tamares was willing to cede branding rights to the property as part of a joint venture agreement, suggesting the company wasn't enthusiastic about keeping the Plaza name.

Morris also tried to rebut claims by Tamares that it delayed renovations of the downtown Plaza because it was paralyzed by the prospect of a hotel by the same name on the Strip.

He said the economy, not the alleged trademark infringement, caused any renovation delays.

"It fell apart because the financial markets were upside down," Morris said. "They couldn't get the money."

The case is significant locally because it will either affirm or undermine the identity of one of the largest hotels downtown.

There is also a global interest because both the owners of Tamares and Elad are prominent international businessmen.

Tamares was founded by the late Shlomo Zabludowicz and is now controlled by his son, Poju Zabludowicz. The elder Zabludowicz was an Auschwitz survivor who moved to Finland and built an arms company called Soltam, according to a Times of London account.

The son, 55, now controls Tamares and is a prominent contributor to conservative causes in England and Israel, the Times reports. Although a Zabludowicz spokesman told the paper it was his company, not he, who was making donations.

Elad, the company behind plans for a new Plaza on the Strip is controlled by another billionaire, investor Yitzhak Tshuva of Israel.

Tschuva bought the New Frontier in May 2007 from Phil Ruffin for $1.2 billion, a deal that set a record for real estate prices on the Strip.

At the time, officials from Elad, which owns the Plaza Hotel in New York, brushed off concerns about a potential conflict with the downtown Plaza.

The downtown Plaza is 37 years old and was formerly owned by downtown gambling kingpin Jackie Gaughan, who sold it to a group that included Tamares in 2004.

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