Monday, March 17, 2008

Plaza Put On Hold, As Wynn Predicted

We interrupt this Swiss travelogue to report breaking news this morning (OK, it's night here in Fribourg) that the planned $6 billion, 3,500-room hotel-casino supposedly to be called the Plaza across from Wynn Las Vegas is being put on hold because of the challenging lending market.

This is intriguing because sort of Steve Wynn predicted as much last week during an interview I conducted on a variety of topics. This was the best bit:

Friess: Do you have a question about whether they'll actually build that or not?
Wynn: I don't know. In this financial market, I'm hoping they do because I want a good looking neighbor. But truth be known, I'd rather have empty property than the Frontier there.
Friess: Well, they took care of that.
Wynn: It was painful. It was agony, that place. Uck.

That was on Tuesday. By the by, here's the investors' note from Wachovia today:

According to Yediot Ahronot, Israeli sponsors (Nochi Danker and Yitzhak Tshuva) for the Las Vegas Plaza (3,500-room) hotel and casino development have announced that the $6 billion (estimated all-in investment) project is on hold due to the subprime crisis in the United States. In our opinion, it will be very difficult for new gaming development projects throughout the country to obtain financing in the near term unless project sponsors are willing to significantly increase their equity contributions. The news source also stated the Plaza sponsors do not plan on engaging project financing until the subprime crisis ends. We expect land valuations to be under pressure in Las Vegas as will merger and acquisition activity throughout the gaming industry until the credit crisis abates. On a positive note, the slowing strip development in Las Vegas should provide existing Strip operators and projects currently under way (City Center, Echelon, and Encore) more time to digest both room supply and gaming floor capacity additions.

So slower growth may be good for MGM Mirage, Boyd and Wynn. I just wonder if this changes the fate of the Plaza name now...


Danny G said...

hey steve, that's great, but you probably didn't notice because you're away that Joe Schoenmann did it again today...he wrote a piece about the coffee shop he evidently hangs out in AND he misspelled the name of an MGM guy, Rob Elliott. Sad. But people will defend him anyway, won't they?

John said...

The owners of the project are denying the rumors.

It might be because I'm from New York but I've hated the design of the Plaza ever since I first saw the renderings :

There are many things I liked about the IDEA of a recreation of The Plaza and with the Las Vegas Strip continuing to evolve on the north end into a kind of premier avenue or boulevard with prime properties like City Center, Echelon and Fontainebleau. But when I saw those renderings I was actually offended. I just makes me think they took the concept of The Plaza and put it into a MATRIX machine and came out with a multiple faceted distortion of classic beaux-arts design. I understand how the developers need to capitalize on Strip real estate - anyway - that's my 2 cents.

At least Steve Wynn go to see The Frontier imploded
and eventually Wynn will develop around the Wynn Golf Course in a more tasteful way.