Plaza Exec Says Credit Crunch Won’t Hurt USD 5 Billion Vegas Project

Las Vegas (AP) — The ongoing shake-up in debt markets won’t slow plans by the owners of The Plaza hotel in New York to build a USD 5 billion luxury casino resort on the Strip by 2011, the project’s new director said Monday.

The investors, Elad Group and IDB Development Corp. Ltd., both of Israel, are „substantial partners“ with adequate access to capital, said Daniel Wade, who was named as chief operating officer of the Las Vegas project on Monday.

Elad is owned by Israeli billionaire Yitzhak Tshuva, and IDB is the largest investment company in Israel and is listed on the Tel Aviv stock market.

„They’re confident that this project will continue on, on schedule,“ said Wade, 55, a former vice chairman of MGM Mirage Inc. who helped engineer the merger of MGM Grand Inc. and Mirage Resorts Inc. in 2000.

„Both companies are very solvent and we can continue on as we are right now,“ he said. „The financing will be put in place as needed. And we feel very comfortable on our timeline.“

The project’s developer, Elad IDB Las Vegas, is set to demolish the New Frontier hotel-casino this fall and begin construction on the prime 34.5-acre site late next year, Wade said. The company bought the site from billionaire Phil Ruffin for USD 1.2 billion this year.

When the five-tower, 3,500-room hotel, casino, condo development and shopping center opens in late 2011, it will serve the highest end of the market, he said.

Wade said the market for luxury accommodations will not be saturated by the time the property opens, even after the December opening of Las Vegas Sands Corp.’s USD 2.6 billion Palazzo, Wynn Resorts Ltd.’s USD 2.2 billion Encore in early 2009, MGM Mirage’s USD 7.4 billion CityCenter in late 2009, and Boyd Gaming Corp.’s USD 4.8 billion Echelon in 2010.

„When you hear a room in Las Vegas is going for USD 500 or USD 400 or USD 300 a night, some people think that’s all high-end,“ Wade told The Associated Press.

„It is and it isn’t. If you go to New York today and rent a room, you’re fortunate to get something for USD 600 or USD 700 or USD 800. Comparatively, there’s still a benefit here.“