It’s the easiest job in Las Vegas — sitting back and collecting big rent checks on empty land.
The Elardi family, former owners of the long-ago-demolished Frontier hotel on the Strip, still own a 16-acre chunk of the site and have leased it to a succession of developers for more than two decades.
The current renter, Wynn Resorts, currently pays $4 million per year to lease the vacant plot, a securities filing shows.
Wynn also confirmed it pays the property taxes on the site, located just south of Resorts World Las Vegas.
The Las Vegas Strip’s casino real estate market is now dominated by rent-collecting landlords, who over the past several years spent billions of dollars to buy megaresort properties and then lease them to the operators for hefty sums.
Those deals cover the entire property, from the land to the buildings. Ground leases alone, however, are rare on the Strip.
“It is a little surprising that you don’t see more,” said Michael Parks, a hotel-casino specialist with real estate brokerage CBRE Group, who has done numerous deals on and near Las Vegas Boulevard.
Parks said he doesn’t know why the Elardis kept one portion of their site when they sold the Frontier in the 1990s. He tried to bring prospective buyers to the family over the years but didn’t hear back, he said.
The Elardi family, who also own Casino Royale on the Strip, did not respond to requests for comment.
Yearslong strike
Margaret Elardi, who had owned a casino in downtown Las Vegas and another in Laughlin, and was described by Forbes magazine as a “grande dame with brass knuckles,” acquired the Frontier and neighboring Silver Slipper in 1988.
She demolished the Silver Slipper and turned it into a parking lot for the adjacent hotel. During her ownership of the Frontier, workers staged a six-year-long strike that, according to the Culinary Union, featured a 24-hours-a-day, seven-days-a-week picket line.
According to published accounts, more than 500 workers at the Frontier went on strike in 1991 over cuts to compensation and benefits, shouting “scab” and “loser” to anyone who crossed the picket line.
The strike — reported at the time to be the nation’s longest ongoing labor dispute — ended when Kansas businessman Phil Ruffin purchased the Frontier. He took ownership in early 1998 after agreeing to buy the hotel for more than $160 million.
Ruffin was considered the hotel’s savior and, with the Rev. Jesse Jackson at his side, held a triumphant media event and party to mark its grand reopening, the Review-Journal reported.
Elardi didn’t sell their whole property, though. County records show that she leased the northern portion of it to Ruffin in 1998 for a term of 99 years.
Ruffin, now the owner of Treasure Island and Circus Circus, said in a phone interview Friday that he tried to buy the other parcel but that Elardi wanted to keep it for her grandchildren.
He said Elardi was a good businessperson and good operator up against an industry dominated by male casino owners. He also figured her grandkids would never have to work, given the rental income from the plot on the Strip.
“It’s a very nice legacy she left her grandchildren,” Ruffin said.
Big plans, but nothing built
After his purchase, Ruffin renamed the hotel the New Frontier. In 2007, at the peak of Las Vegas’ mid-2000s real estate frenzy, he sold it to Israeli investors for $1.24 billion.
Elardi had transferred ownership of the leased plot to her children a few years before Ruffin sold the hotel, and his buyers took over the ground lease with the family, county records show.
The new owners imploded the New Frontier in 2007, with plans to develop a multibillion-dollar Plaza-branded resort. But the real estate bubble soon burst, the economy crashed, and the project was never built.
In 2014, Australian billionaire James Packer and partners acquired the vacant site through foreclosure. They also assumed the ground lease with the Elardis, county records show.
By the following year, they were paying $3.75 million annually to lease the parcel, the Las Vegas Sun reported.
Packer’s group set out to develop an 1,100-room hotel-casino called Alon Las Vegas. But Packer reportedly had trouble raising project funds, and his former casino company Crown Resorts bailed on the development in 2016 and put the land up for sale.
In late 2017, Wynn Resorts announced it was acquiring the former Alon site and some adjacent acreage for $336 million. The casino operator also took over the ground lease with the Elardis.
According to a securities filing, Wynn was initially slated to pay $3.8 million per year until 2023 to lease the land, with scheduled rent hikes in the years ahead.
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‘Stay tuned’
Wynn Resorts founder Steve Wynn told analysts in early 2018 that he wanted to move quickly on a project on the 38-acre assemblage, located across the street from his resort towers Wynn Las Vegas and Encore.
Days later, The Wall Street Journal reported that the casino boss had a decadeslong pattern of sexual misconduct. Wynn, who called the allegations “preposterous,” soon resigned as chairman and CEO of his namesake company, citing “an avalanche of negative publicity.”
Today, Wynn Resorts’ land tract remains empty.
Wynn CEO Craig Billings said in a conference call with analysts in February that the company has a “substantial land bank” in Las Vegas, and he indicated that he often gets asked why he isn’t building a project there.
He said that the company can only take on so many projects at once – it’s currently developing a resort in the United Arab Emirates – and that it doesn’t want to “cannibalize” itself.
Still, Billings said the company has done early studies and “doodles” on what could work for the site.
“At this point, I would say stay tuned,” he said.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
