LOOKING IN ON: GAMING

By Liz Benston

Thursday, March 22, 2007 | 7:09 a.m.

When he's not funding the translation of foreign-language texts and publishing hidden literary gems, the well-read and reclusive casino executive Glenn Schaeffer has been pitching Wall Street on a $2.4 billion financing package for his Fontainebleau Las Vegas resort at the site of the former El Rancho.

There has been little action at the site since it was announced as a $1.5 billion resort in 2005 with plans for a 2006 groundbreaking.

Fontainebleau is raising $1.85 billion in bank loans and bonds and contributing $430 million in equity with the expectation of selling about $700 million worth of condos.

Wall Street is still bullish on the delayed resort because of confidence in Schaeffer, former Mandalay Resort Group president and chief financial officer. Schaeffer is chief executive of Fontainebleau Resorts, the private company he formed with condo partners Turnberry Associates in Florida to build the Las Vegas resort and others worldwide.

Schaeffer says the company has hired a highly experienced development team that will be crucial to the project's acceptance on Wall Street.

Word that New Frontier owner Phil Ruffin is negotiating to sell the well-worn property has some skeptics wondering if this is just the deal of the month for a landlord who has had off-again, on-again plans to redevelop or sell the property since he bought it in 1998.

But Ruffin's negotiations with New York real estate investors El Ad Properties have advanced further than with any other potential buyer or partner.

Ruffin says he's close to selling the 34-acre site for almost $40 million per acre - at least double what investors have previously paid for Strip frontage - but a final contract hasn't been signed, nor has El Ad put up any money.

Ruffin paid close to $200 million for 41 acres in 1998. With the New Frontier debt-free and the threat of rising capital gains taxes, the time may be ripe to cash in his chips.

Privately held El Ad would likely make the New Frontier the next implosion spectacle on the Strip, bidding a fast goodbye to Gilley's and a hello to Fifth Avenue.

A public company couldn't justify spending that kind of money for the return, Deutsche Bank Securities stock analyst Bill Lerner said. It would make sense for El Ad, known for renovating the Plaza hotel and other landmark buildings in New York, to bring a Plaza-branded luxury hotel to Las Vegas, Lerner said.

Ruffin says he has already arranged $2.7 billion in financing to build his Montreaux-brand resort when the offer came "out of the blue."

Selling the property for $40 million per acre would double Ruffin's net worth, estimated at $1.4 billion by Forbes last year. Ruffin's Kansas company owns one of the largest makers of hand trucks, as well as gas stations, hotels and other commercial buildings.

Busy Boyd Gaming is cleaning up Stardust debris to make way for Echelon Place, building a casino in Florida and constructing a hotel in Michigan.

But the company has put its planned North Las Vegas casino on hold.

Boyd had won zoning approvals for the 40-acre site at Lamb Boulevard and Centennial Parkway and was securing construction permits when it decided to back off and review growth in the area. The proposed construction start was mid-2007.

That makes Station Casinos' Aliante Station the only new casino under way in North Las Vegas, which has a long way to go before it catches up with the growth of slot bars and casinos in the south valley.

Only two other sites in North Las Vegas are zoned for casinos, but those plans aren't active. An 89-acre parcel at Ann Road and Lamb Boulevard was preliminarily zoned in 2004 for a mixed-use project. A smaller parcel at Centennial Parkway and Interstate 15 received gaming entitlements in 2002 that have been extended, although no plans have been submitted to the city - notwithstanding the hype surrounding a $4 billion sports-themed casino with 5,500 rooms and multiple arenas that would have started construction last year.