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Posted on: April 1, 2024, 01:06h.
Last updated on: April 1, 2024, 01:07h.
In May 2007, billionaire Phil Ruffin sold the historic Frontier casino resort on the Las Vegas Strip to an Israeli-owned real-estate investment group for a then-record $1.2 billion.
“We’ve been successful with the property,” Ruffin told the Las Vegas Review-Journal at the time, “but it got to a point where it was better to let someone else come in and redevelop the site.”
El-Ad Properties imploded the landmark 65-year-old property that November, planning to build a 4,100-room replica of New York’s Plaza Hotel, which it also owned, on the 35-acre site. Its construction cost was an estimated $6 billion.
Nearly 17 years later, those 35 acres remain vacant.
Another Vacated Plan?
Last week, Bally’s Corp. announced that it will demolish the Tropicana Las Vegas in October, after permanently closing it at 2 a.m. April 2.
The Rhode Island-based company claims its plans to build a $1.5 billion baseball stadium for the relocating Oakland A’s are still full-steam ahead, and that construction will start on 9 of the Tropicana site’s 35 acres in April 2025.
However, many knowledgeable Las Vegas observers fear those plans will hit an iceberg and leave the Strip with the one thing it doesn’t need — another 35-acre vacant lot for nearly 20 years.
“You can never have too many imaginary ballparks,” noted Casino.org‘s Scott Roeben in a scathing recent rant on his Vital Vegas blog.
Though the Las Vegas Stadium Authority last week denied that the recent further downgrading of Bally’s credit rating into junk territory by Moody’s would derail the company’s stadium construction plans, many financial analysts disagree. They speculate that the downgrades could, indeed be the iceberg that sinks this ship.High leverage and junk credit ratings are problematic for companies seeking financing, they pointed out. That’s because if those firms issue corporate debt, they must do so with high interest rates to compensate creditors for perceived risk.
In addition to building a baseball stadium, and an adjoining casino hotel on the Tropicana site, Bally’s is also attempting to build a casino hotel in downtown Chicago, and those plans have already fallen a reported $800 million short.
Crowning Non-Achievements
The Great Recession is the iceberg that sank El-Ad’s replica Plaza project — as well as stalling the nearby Fontainebleau project for more than 15 years.
It wasn’t until 2014 that hope returned for a “new Frontier.” That’s when Australian billionaire James Packer paid more than $240 million for the lot across from Wynn Las Vegas. His casino company, Crown Resorts, announced big plans for it, too. It would build a $6 billion resort, the Strip’s most expensive to date, called Alon Las Vegas.
But Packer reportedly had trouble raising the funds and the site, plus three adjacent acres, was sold in 2017 to Wynn Resorts, which paid $336 million.
Wynn Resorts chair Steve Wynn announced his own big plans. The site would house a 1,100-room casino resort called Wynn West — after its situation on the west side of the Strip, across from the Wynn’s other two towers. Wynn West would connect to them via an air-conditioned bridge.
“I don’t think the design and development period is going to be very long,” Wynn told analysis during his Q4 2017 conference call.
That project’s iceberg needs no explanation, as this was one of Wynn’s final acts before being forced to step down as chair of the company he founded in 2018.
On the eve of the Tropicana shutdown, one can’t help wondering if we’re watching history repeat itself.
“The true believers keep on believing, of course, because Las Vegas was built on optimism and short memories,” Roeben noted.
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