Crown Resorts Ltd. is leading an investment group that has acquired the vacant Las Vegas Strip site where the New Frontier hotel-casino formerly sat and has announced its intention to build a hotel-casino resort.
The deal marks the latest in a series of attempts by Melbourne, Australia-based Crown Resorts, a developer and casino-resort operator, to invest in the resurgent Las Vegas market.
Crown Resorts, whose chairman is Australian billionaire James Packer, holds a majority stake in the newly formed development partnership, which also includes former Wynn Las Vegas President Andrew Pascal and asset manager Oaktree Capital Management.
The group paid $280 million for the 35-acre site across the street from the Wynn and Wynn's Encore. It will break ground next year on a project slated for completion in 2018. The group didn't disclose further details about the size or scope of the resort.
The project marks at least the fourth in the Las Vegas area for Crown Resorts during the past decade and the third near the northern end of the Strip. Among the properties the company owns are the Crown Melbourne and London's Crown Aspinall's casino. It also holds a 34% stake in Macau resort operator Melco Crown Entertainment Ltd.
Crown Resorts at one time had plans for a hotel-casino tower to have been called Crown Las Vegas, designed to have been Nevada's second tallest building, trailing only Las Vegas' Stratosphere Tower. But the project was mothballed in 2008.
Crown Resorts was also an investor in the 3,889-room Fontainebleau Las Vegas, which was slated to be a sister property to the iconic Miami resort and which broke ground in April 2007. That $3 billion project, also at the northern end of the Strip, was about 70% completed when it fell into bankruptcy and halted construction in April 2009.
Crown Resorts said last month that it reached a settlement with lender-plaintiffs on the project, which remains abandoned. Terms of the settlement were not revealed.
Additionally, Crown Resorts in late 2007 agreed to pay $1.75 billion for Canary Casino Resorts, whose properties include Las Vegas' Eastside Cannery Casino Hotel and North Las Vegas' Cannery Casino Hotel as well as Pennsylvania's Meadows Racetrack & Casino. That agreement was terminated, and Crown acquired a 24.5% stake in the company for $320 million.
This time around, Crown is entering a Las Vegas market that's on pace to set a record for annual tourists this year and whose visitor count through June was up 4.2% from a year earlier, to 20.7 million, according to the Las Vegas Convention & Visitors Authority. Those numbers have translated to hotel demand, as revenue per available room on the Strip is up 9.9% this year.
Crown's newest development site is where the New Frontier stood for 65 years before being razed in 2007.
That area, along the northern portion of the Strip, has been experiencing a surge in development activity. Later this month, SBE Entertainment will open its 1,620-room SLS Las Vegas, a $415 million project on the old Sahara site.
Meanwhile, Malaysia-based resort operator Genting earlier this year took over the Echelon Resorts site that Boyd Gaming abandoned in 2008 and announced plans for Resorts World Las Vegas. That development is slated to have 3,500 hotel rooms, 175,000 square feet of gaming space, several restaurants and shops. The project's first phase is slated to come online in 2017.