Friday, August 22, 2003
Copyright © Las Vegas Review-Journal

New Frontier owner discussing joint ventures

Phil Ruffin, owner of the New Frontier hotel-casino, Thursday said he's talking with several casino operators about possible joint-venture redevelopment projects on the Strip site. REVIEW-JOURNAL FILE PHOTO

Several major casino operators are now in serious discussions with New Frontier owner Phil Ruffin about a possible joint-venture casino redevelopment, the Kansas-based investor said Thursday.

Ruffin also said he's no longer attached to his 4-year-old plans to redevelop the New Frontier casino as a $1 billion San Francisco-themed megaresort called City by the Bay.

Instead, the site's development will likely be influenced by one or more prospective joint-venture partners, he said, although he declined to name any of the operators.

"We'll have an announcement in three or four months -- or less," Ruffin said. "We're talking to a bunch of folks, companies you would know."

The San Francisco theme he had planned for one hotel-casino may be dropped if a joint-venture partner has other ideas, he said.

Ruffin's plans to redevelop the New Frontier have been stymied in recent years. He bought the property for about $170 million and plowed additional millions into reversing the effects of the six-year Culinary union strike against its former owners.

Three years ago, interest rates were too high for Ruffin to borrow the money he needed to build a new resort. Then the terrorist attacks of 2001 and last year's economic doldrums made raising money too tough.

Now, interest rates are down, the New Frontier's saving $3 million in annual cash flow because Ruffin was able to lower the cost of its debt from 8 percent to 5 percent, and the location adjacent to Fashion Show mall and across the street from the $2 billion Wynn Las Vegas is obviously a prime spot, he said.

"Our location is getting hot," Ruffin said. "We'll damn sure do something here. It's too valuable not to."

One Wall Street analyst said the New Frontier site deserves attention from potential investors.

"The site is so large, it's next to the mall, to Wynn, the convention centers and the freeway," said the source, who spoke on condition of anonymity.

The analyst said he'd be surprised if the Strip's major operators made a joint-venture deal with Ruffin because each of the companies has other investment plans.

One New Frontier redevelopment project is certain to be built, Ruffin said.

Trump Tower Las Vegas, the upscale condominium project Ruffin and New York real estate magnate Donald Trump plan for the southeast corner of the New Frontier site, is set to begin sales very soon, once the project's design is finalized, Ruffin said.

"Trump Tower is firm, it's committed," Ruffin said. "I'm having dinner with Trump (Thursday night) to talk about it."

The duo's Trump Tower project has changed. What was a $350 million, 60-story condominium that would have been taller than all Las Vegas buildings save the Stratosphere is now expected to be 43 stories and cost about $272 million.

Trump Tower is slated for a 3 1/2-acre site less than a mile west of the Strip, just east of Industrial Road.

The tower would be behind the New Frontier and directly across from Nordstrom at Fashion Show mall.

The condominium would target ultrahigh-end buyers, with its 300 units averaging about $1.5 million each.