Subscribe to Print Edition | Tue., November 18, 2008 Cheshvan 20, 5769 | | Israel Time: 03:39 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Las Vegas site hasn't dropped in value, claims IDB group firm By Michael Rochvarger Tags: IDB, Las Vegas, Nochi Dankner  Property & Building will be attaching an evaluation of the Las Vegas land it bought with Elad Properties to its third-quarter financial statement. In a surprise to capital market circles, based on a third-party evaluation, the IDB group company means to argue that the land hasn't dropped in value. Property & Building is owned by Nochi Dankner's IDB group, while Elad is a privately-owned Yitzhak Tshuva vehicle. The two companies bought land to build the Plaza Las Vegas casino and enterprise complex. Together they paid $1.25 billion for the site, which used to house the Pioneer Hotel. Since property prices in the United States went bust, real estate circles have been saying that in hindsight, the two companies massively overpaid. Advertisement But based on an appraisal by CB Richard Ellis, otherwise known as CBRE, the land is still worth $1.25 billion or even a bit more. That means the companies won't have to write down the value of the land in their quarterly financial statements. CBRE's unfashionably optimistic evaluation is predicated on the land being the last of its kind available in the gambling Mecca. It's right on the Strip and there isn't any other land available for development there. Also, the land in question comes with extra building rights, CBRE notes. Its evaluation contrasts with a recent analysis by the Tel Aviv investments firm I.B.I., which decided that the value of the land had dropped by 65%, to about $440 million. From the year's start, shares of Property & Building have fallen by more than 80%, in no small part because of its exposure to the grandiose Vegas project. At first the parties had been bullish about proceeding with the original construction schedule, but as economic gloom spreads throughout the U.S., even Vegas has been suffering. The Strip's revenues from gambling reportedly dropped 6.7% in August, compared with August 2007. Gambling giants such as Las Vegas Sands, which belongs to Sheldon Adelson, and the Mirage have been admitting to a sharp drop in profits. Originally Elad and IDB had planned to invest as much as $8 billion in the casino project, and to spread the construction (and investment) over four to five years. Even if the value of the land really is intact, there is no question but that investment will have to wait somewhat. But the two companies had paid for the Vegas land by borrowing just over half the amount - $6.25 million. They can extend the duration of the loan twice, by six months each time, without changing its terms. After that, it may be another story. Bookmark to del.icio.us   Crime boss killed Ya'akov Alperon was killed just after his son was indicted for alleged murder attempt Peres at GA, Jerusalem Peres stresses that strong U.S. Israeli ties will not change under Obama's administration

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