SEARCH NEWS:

 

Ruffin to Sell Bahamas Properties

by Rod Smith

LAS VEGAS -- Developer Phil Ruffin hopes to jump-start redevelopment of his 41-acre New Frontier site on the Strip with funds from the sale of his Bahamas properties.

Wall Street analysts said Baha Mar Development, a group headed by former Lehman Brothers executive Rob Heller, is buying Ruffin's Wyndham Nassau and Nassau Beach Hotel properties for an undisclosed price.

Ruffin on Wednesday confirmed a 120-day option has been signed for the sale of the 400-acre site and the investment group, which includes foreign and American investors, is conducting due diligence on the acquisition.

If the deal closes as Wall Street sources expect, Ruffin said he will invest the proceeds with a joint venture partner in redeveloping the New Frontier across from Wynn Las Vegas and Fashion Show mall.

Ruffin cautioned that he is involved in negotiations with a number of possible partners and that plans for the redevelopment will not be completed until a development partnership is finalized. He also said the Bahamas deal could still fall apart.

However, he stressed that the New Frontier site is not for sale, as reported recently, and he still plans to redevelop the property as a megaresort.

Deutsche Bank analyst Marc Falcone said such plans are appropriate for Ruffin and for the New Frontier site.

"There couldn't be a better parcel of land in Las Vegas over the next five years," he said.

Falcone said developer Steve Wynn will continue to build out Wynn Las Vegas on the old 137-acre Desert Inn site, which will be a substantial draw for Ruffin's redevelopment project.

Eric Hausler, gaming analyst for Susquehanna Financial Group, added that plans to redevelop the Stardust and Riviera, along with the Trump tower on three acres of the Ruffin site and the Palazzo at The Venetian, will also serve as magnets for the Ruffin project in terms of investors and visitors once it is built.

New York developer Donald Trump announced in July he plans to build a 64-story hotel and apartment tower in a 50-50 venture with Ruffin.

"That end of the Strip is going to see real heavy redevelopment through the end of the decade. The more you redevelop there, the more critical mass and it increases the area as a draw," Hausler said.

"To redevelop the New Frontier is the best use for the parcel and something that will add to and complement the other resorts," he said.

Although Ruffin has said he is no longer wedded to the San Francisco-themed destination resort he proposed years ago, sources familiar with the planning said they expect him to develop a $1 billion-plus megaresort complex.

Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, said the case for such a development will be compelling for investors, especially with Wynn Las Vegas opening across the street in April.

University of Nevada, Las Vegas professor Bill Thompson, who specializes in gaming studies, said the resort will have to be competitive in quality with Wynn Las Vegas, The Venetian, Treasure Island and the redeveloped Stardust to succeed.

But he said together the developments will turn the intersection of Spring Mountain Road and Las Vegas Boulevard into a new draw for the destination equivalent to the resorts at Tropicana and the Strip and those at Flamingo Road and the Strip.

"I think $1 billion is what it'll take, but there are a lot of equity investors that have a lot of money nosing around," Thompson said. "Las Vegas is hot right now and Ruffin should be able to attract the capital, especially now that (for the first time) he has a plan for putting his own money in."

In the Bahamas, the Baha Mar investment group plans to invest $1.2 billion in a 2,500-room complex, casino and golf course similar to Kerzner International's Atlantis property on Paradise Island in Nassau, Wall Street sources said.

Copyright GamingWire. All rights reserved.

< Gaming News