LAS VEGAS-For $1.2 billion, Wichita billionaire Phil Ruffin has agreed to sell the 34.5-acre New Frontier Hotel & Casino on the Las Vegas Strip to Israeli billionaire Yitzhak Tshuva, who plans to invest an additional $3.5 billion developing a mixed-use casino-resort. The new development will be branded after New York City’s Plaza Hotel, which he acquired in 2004. Confirmed this morning by Tshuva’s New York City-based Elad Group, the news comes about eight weeks after Ruffin revealed he was negotiating the sale of the aging casino resort to Elad.

New Frontier is located across from Wynn Las Vegas and its sequel, the Encore. Tshuva’s goal is to scrape the site next year and have the new resort up and running by 2011. If completed, Tshuva’s project would come to market at the tail end of a building boom on the Strip that over the next four years will add nearly 50,000 hotel rooms to the existing stock of about 133,000. Elad president Miki Naftali was not immediately available Wednesday morning for comment beyond his prepared statements.

Rather than another theme park resort, Tshuva plans to follow in Wynn’s footsteps and develop a high-brow resort like the Plaza, which he acquired for $675 million. The Plaza in Las Vegas plans to feature a six-diamond hotel, private residences, the Plaza Retail Collection and, of course, a casino, destination restaurants and convention space.

Meanwhile, Ruffin walks away having made a hefty profit. He acquired the acreage in the late 1990s for less than $200 million, according to published reports. Ruffin had been planning a Swiss-themed, Montreaux-brand resort for the site, for which he says he had lined up $2.7 billion in financing. His reasons for selling reportedly include the rising cost of construction and the relatively low 15% federal tax on capital gains. David Atwell of Resort Properties of America brokered the sale.

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