Friday, July 30, 2004 | 10:48 a.m.
Real estate mogul Donald Trump and casino owner Phil Ruffin, who two years ago announced plans for a Las Vegas Strip-area condo tower, said Thursday that those plans had been scrapped and are being replaced by a larger project.
Construction on the 645-foot tall, $300 million, Trump International Hotel and Tower is expected to begin during the first quarter of 2005 and will front Fashion Show Drive between Las Vegas Boulevard and Industrial Road. The tower is to be built on 3.5 acres of vacant land and is directly across from the Nordstrom and Robinsons-May department stores at the Fashion Show mall. Construction is expected to take 18 months, Ruffin said.
By comparison, Steve Wynn's Wynn Las Vegas, which is under construction across Las Vegas Boulevard from the planned Trump tower, will be 614 feet tall when completed. The Stratosphere Tower, part of the Stratosphere hotel-casino, is the tallest free-standing structure in the western United States at 1,149 feet.
Trump said there will not be a casino component to his project.
"It will be a super luxury residential hotel condominium," Trump said in a phone interview from his New York office.
Final approval will be considered by the Clark County Commission on Oct. 6.
The announcement was made the same day Trump's casino company reported a wider loss amid tougher competition in Atlantic City.
The Las Vegas condo announcement is the latest evolution of plans to redevelop the New Frontier site.
Ruffin in 2000 announced plans to tear down the New Frontier and build a megaresort. In 2002 he announced a partnership with Trump to build a luxury condominium tower behind the planned resort and across from the Fashion Show mall, which completed its own $1 billion expansion last year.
The latest plans call for a 1.6 million-square-foot tower that would house more than 1,000 condominium-hotel units ranging in size from 636 square feet to 1,057 square feet, with combinations of 1,693 square feet. Another 50 "residential homes" would range in size from 3,000 square feet to more than 10,000 square feet. Each use will have a separate lobby. Prices have not been set.
People can purchase units in a condo-hotel and can use them at-will and can opt to place the units in a rental pool that will rent out the units like a hotel when they are not in use by their owners. Some condo-hotels place limits on the amount of time owners can use the units. But Ruffin said that would not be the case with Trump International.
"The units will be sold to individual buyers, who will buy the rooms and the Trump marketing team will rent it out (if desired)," Ruffin said.
Ruffin said the delay in various plans that both he and Trump have discussed is because of other business ventures that took up time.
"(Trump) was doing 'The Apprentice' and we were both doing various things," Ruffin said, referencing Trump's NBC reality TV show.
As to why Trump continues to pursue a Las Vegas Trump tower with Ruffin, Trump chalks it up to friendship and the city itself.
"I'm so busy in New York -- I'm the biggest developer in New York -- but I really like Las Vegas and Phil Ruffin is a terrific friend of mine, so we're going to do a Trump Tower."
Trump and Ruffin will each have a 50 percent interest in the project, both said. The land for the tower would be transferred to a limited liability company, Ruffin said.
The condo-hotel is being patterned after Trump's Trump International Hotel and Tower in Manhattan, which was recently voted the best hotel in New York by Travel and Leisure and the New York Post, Trump said.
Plans for Trump International Las Vegas include restaurants and a luxury spa and salon. The tower will feature windows tinted with 24 karat gold "with sparkling white accents" and is designed by Bergman, Walls and Associates Ltd. Architects of Las Vegas.
The Las Vegas Trump International Hotel and Tower is the latest announcement in a growing field of planned condos and condo-hotels on and near the Strip.
Turnberry Associates recently began selling condominiums in its fourth tower at Turnberry Place, on Paradise Road across from the Hilton hotel-casino.
The Residences at MGM Grand, a joint venture between Turnberry Associates and MGM MIRAGE, is a condo-hotel behind MGM Grand that recently sold out its first tower and will eventually have a total of three towers (scaled down from an original six). Construction on the first 38-story tower is expected to begin in August.
Other nearby projects include Krystle Sands, a planned 510-foot, 45-story condominium hotel on the site of the Algiers Hotel. Florida developer F.W. "Freddie" Schinz paid more than $26.2 million for the 3.6-acre site and closed on it this month.
Nevada Development Partners, a partnership of Aaron Yashouafar, chief executive of Los Angeles-based Milbank Real Estate Services Inc., along with California developers David Pourbaba and Neil Kadisha, announced this month it would build a 40-story condominium tower at the west side of Las Vegas Boulevard, just north of Circus Circus hotel-casino and south of the Hilton Grand Vacations Club time shares.
Lorenzo Doumani, chief executive of Majestic Resorts, is planning a luxury condominium tower, the 42-tower Majestic on the site of the old La Concha Motel. The tower will be built in conjunction with a luxury resort property where Hilton Hotels Corp. has announced plans to build a Conrad hotel.
Resort real estate broker David Atwell said despite the growing competition, "there is always room for the best quality."
"A Donald Trump product with his name and quality will definitely be a major attraction," Atwell said. "It will sell when others might falter."
Despite past announcements, Atwell said he expects this tower will happen.
"I think that they've made a deal that they're going to commit to," he said.
A sales office and unit model will be constructed on the corner of Las Vegas Boulevard and Fashion Show Drive. Sales are expected to begin in 90 days, Trump said.
"Our hope is to sell fast," Ruffin said. "This will be a world class property."
As to other plans for the redevelopment of the Frontier Hotel and its 41-acre site, Ruffin said it's too early for any announcements.
"We're still working on things right now," he said. "This is the first toe in the water."
Separately, Trump Hotels and Casino Resorts Inc., the flagship of Trump's debt-laden casino holdings, reported increased losses for the second quarter and a dwindling supply of cash on Thursday, leaving the struggling company in an increasingly perilous financial position.
Beginning with Memorial Day weekend, the summer season typically is the most lucrative for Atlantic City casino companies because more people are on vacation and looking to gamble. But Trump Hotels lost $17.6 million, or 59 cents a share, in the quarter, compared with a loss of $10 million, or 46 cents a share, in the same quarter last year.
More ominously, Trump Hotels' cash reserves -- which it needs to help reduce its $1.8 billion in debts -- are shrinking. The company says it has $81.1 million on hand, down from $124.3 million in the first quarter of this year.
Although Trump enjoyed a star turn as a business guru on the hit television show "The Apprentice," his casino company has never been profitable since going public in 1995. Trump Hotels, with casinos concentrated in Atlantic City, has been flirting with bankruptcy this year, scrambling to make a last-minute, $73.1 million debt payment in May. A similar payment is due in November.
Trump Hotels is talking with its bondholders about restructuring its debts, two people briefed on the negotiations say. One plan under consideration involves a $400 million cash infusion from Credit Suisse that would greatly reduce Trump's equity stake in the company and force him to step aside as chief executive.
Bondholders also would have to accept a loss for the deal to go through.
Addressing his company's slumping profit, Trump said in an interview that rising gas prices had cut into gamblers' budgets in the second quarter. "Maybe the high rollers won't use their jets," he said. "For people who drive their automobiles, it certainly has an impact on the amount of money they have when they reach their destinations."
More importantly, he said, his company's earnings were hurt by gamblers who were winning more money than usual. Trump Hotels said in a statement that the "hold percentage" at its table games, a measure of how much money a casino rakes in from losing gamblers, fell substantially in the quarter.
"We consider ourselves to be very open to having people win," Trump said. "It's bad for me, but it brings other people. It can even out over the course of a year."
And Trump's company has lost business to the Borgata Hotel Casino and Spa, a high-end enterprise that opened in Atlantic City last summer and is co-owned by MGM MIRAGE and Boyd Gaming Corp.
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