Mediation Fails, Says Broker Suing for $12M Fee

Reportedly in attendance for the defendants were Plaza Las Vegas COO Dan Wade, El-Ad Property's head counsel, and Wichita billionaire Phil Ruffin, who owned the property with Margaret Elardi. Not in attendance was El-Ad president Miki Naftali, whom Atwell says ultimately nixed the deal.

"We had a deal, everyone present agreed, but unfortunately it was not acceptable to Mr. Naftali," says Atwell. In a prepared statement that quotes Naftali as saying during the mediation "this is how we do it in New York. I don't know the brokerage laws in Nevada," Atwell accuses Naftali of "displaying the same arrogance that caused this lawsuit in the first place."

A spokesperson for El-Ad Properties and Plaza Las Vegas tells GlobeSt.com that the quote is "completely erroneous."

"The matter is still in court and should not be discussed when final decisions have not been made," the spokesperson states in an email. "At this time my clients have no comments…and are speaking to their lawyers regarding the press release distributed [by Atwell] with quotes from Mr. Naftali."

Says Atwell, "I tried to be a gentleman about this matter, but after this further run around, no more mister nice guy. Next round is calling Yitzhak Tshuva, El-Ad chairman, forward for deposition." Tshuva's Tel Aviv-based El-Ad Group is the parent company of El-Ad Properties.

Atwell sued El-Ad Properties in July for $12 million, the 1% fee he says he negotiated with El-Ad for initiating the transaction. El-Ad subsequently denied the allegation, saying Atwell "did not earn, and is not entitled to, a commission."

Just prior to the official closing of the acquisition in mid-August, Atwell told GlobeSt.com that El-Ad Properties had made an 11th hour settlement offer. "El-Ad made us a last minute offer to settle before close, but we felt we must decline," Atwell said in a prepared statement at that time. "Our initiation of this transaction, which we can prove, is very valuable in anyone's analysis."

The sale of the New Frontier hotel-casino property was first announced in May. El-Ad Properties, controlled by Israeli billionaire Yitzhak Tshuva, agreed to buy the property for approximately $35 million per acre, the highest price ever agreed to for a large piece of land on the Las Vegas Strip. El-Ad subsequently brought on a partner, Property and Building Corp. Ltd., a subsidiary of Tel Aviv-based IDB Development Corp., and made plans for a multi-billion-dollar redevelopment of the site.

This past March, the joint venture formed for the $6-billion project, El-Ad IDB Las Vegas LLC, received approvals for its site development plan and special use permit from the Clark County Commission. At the time, the JV said design completion and the start of the excavation is scheduled to occur before the end of the year.

Plans called for seven high-rise towers atop a mid-rise podium. The structures would house 4,100 hotel rooms; 2,600 condominium units; 175,900 sf of gaming; 480,000 sf of retail and restaurant space; 539,607 sf of convention space; a 50,000 sf health club; a 1,500-seat theater; and 227,038-sf of recreation space for pools and other amenities.

Since the approvals were in place there have been stories suggesting the project may be on hold due to the dislocated credit markets. Most of the reports seem to have stemmed from an article in the Israeli publication Yediot Ahronot. Naftali has refuted the report, saying the project will move ahead as planned. A Plaza Las Vegas spokesperson did not immediately respond to a request for an update on the project's timeline.

The El-Ad Group, founded in 1992, develops, owns and operates real estate primarily in the United States, Canada and Asia. In addition to Plaza Las Vegas, El-Ad Group and El-Ad Properties are known in the US for their $675-million acquisition and condominium conversion of the historic Plaza Hotel property in New York City in 2004. Its partner, IDB Development, is Israel's largest business group, recording total revenues of $12 billion in 2007 on total assets of $26 billion and $34 billion of assets under management.