LAS VEGAS -- The long dormant site that once housed the New Frontier and was subject of the Strip’s most expensive real estate could become active once again.
Bloomberg News Service reported Thursday that Australian billionaire James Packer had acquired a portion of the loan covering the 34.5-acre site and would consider building a hotel-casino on the land.
Gaming sources declined comment on the potential project.
Union Gaming Group analyst Robert Shore told investors in a research note Thursday that “discussions, proposals, and even speculation around large-scale projects speak to ongoing and increasing interest in Las Vegas assets.”
Packer is majority owner of casino operator Crown Resorts Limited in Australia and jointly owns Melco Crown Entertainment Limited, a Hong Kong company that has casinos in Macau.
In April, his name surfaced as a potential buyer of The Cosmopolitan of Las Vegas. The property was sold a month later to a subsidiary of the Blackstone Group, a multinational private equity investment firm, for $1.73 billion in an all-cash transaction.
According to Bloomberg, Packer bought a piece of a loan backed by the empty Strip property and is negotiating a potential deal with other creditors including Oaktree Capital Group.
Two Israeli companies bought the New Frontier and the land across from Wynn Las Vegas for $1.2 billion — roughly $24.8 million an acre — in 2007. The aging hotel-casino was demolished.
The companies planned to build a $5 billion hotel-casino based on the Plaza Hotel in New York City, but the recession killed the project.
Oaktree, the world’s biggest distressed debt investor, now owns more than half of the abandoned project’s loans after buying the debt at a discount of as much as 50 percent, Bloomberg reported.
Alyssa Linn, a outside spokeswoman for Oaktree, said in an e-mail to the Review-Journal that the company “is declining to comment on this report.”
Packer — who has a net worth of $6.5 billion — is listed at No. 212 on the Forbes List of World Billionaires and is the No. 2 richest person in Australia. He has flirted with Las Vegas in past.
In 2009, Crown terminated a deal to purchase Cannery Casino Resorts, LLC for $1.8 billion and was forced to pay a breakup fee and other penalties totaling $320 million.
In 2007, the company ended plans for Crown Las Vegas, which was to be built on the Strip between the Sahara and Riviera. The Federal Aviation Administration rejected plans for a hotel tower of 1,888 feet, which would have been the tallest building in the Western Hemisphere.
Shore said the investment community is again looking at the Strip’s northern land parcels because of recent activity in the surrounding area.
The $415 million SLS Las Vegas Hotel Casino — a redevelopment of the former Sahara — opens Aug. 23. MGM Resorts International announced plans to develop a 33-acre permanent open-air concert venue across from SLS Las Vegas.
Meanwhile, Malaysia-based Genting Malaysia Berhad is expected to begin construction this year on the $4 billion Resorts World Las Vegas on the former Echelon site, which is located next to the New Frontier parcel.
“(Packer) lends credence to the Strip recovery story, and has fueled the positive news flow centered on the North Strip in the recent months,” Shore said.
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