Construction on the $5 billion Plaza casino-hotel on the Las Vegas Strip is being delayed until 2009, according to an article in the Wall Street Journal.
The project was set to begin construction by the end of 2008 but Michelle Tsang, a spokeswoman for Elad IDB Las Vegas, told the Wall Street Journal that the owners plan to move forward with the project sometime next year. She said, “They’re doing what everyone else is doing.”
Tsang is referring to the recent announcement by Boyd Gaming that they are postponing the construction of the $4.8 billion Echelon while they seek additional financing.
The Plaza partners has also deferred payment of a $625 million loan used to buy the property for the project.
The Plaza project is the result of a partnership between the Elad Group, which owns the New York Plaza, and IDB Group of Israel.
Credits: Las Vegas Now
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Two Israeli businessmen, Nochi Dankner and Yitzhak Tshuva, are planning to build a 5-7 billion Plaza hotel and casino complex on the Strip in Las Vegas.
Odds not in favor
Now, in the uncertain financial tsunami engulfing the world, there are concerns that the project is “high-risk” and the banks are taking a step back, talking about the project’s risk to size ratio, exposure to the falling real estate market in Las Vegas exposure to liquidity risk related to financial institutions’ willingness to extend credit in view of the credit crisis in the US.
Work still needed
Construction is expected to take 4-5 years after building permits are obtained. The companies have yet to sign a financing agreement for the project.
Current data reveals that Nevada is experiencing its first earnings drop since 2001. The casino industry of Las Vegas and the state’s casino industry at large have seen a nearly 5 percent decrease in their revenue in January, compared with the same month last year. Their take, however, was still exceptionally high, at $1.06 billion.
The decrease elsewhere around Nevada, in places such as Reno and North Lake Tahoe, was even more dramatic, down 9.4 percent.
The bottom line
It seems that on this progress report, the bottom line is that there is no significant progress.
A closer look through a financial perspective could lead to an even less favorable conclusion, namely that progress is reversed altogether.
Credit: OnlineCasinoReports.com
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