Repayment of $625 mln Las Vegas loan postponed - Elad
LOS ANGELES, Aug 12 (Reuters) - Two investment banks have postponed the repayment of a $625 million loan used to purchase land on the Las Vegas Strip at a record price of $35 million an acre, one of the borrowers said on Thursday.
Payment of the loan from Goldman Sachs Group (GS.N) and Credit Suisse Group (CSGN.VX) has been deferred until May 2009, according to Michelle Tsang, a spokeswoman for Israel-based Elad Group, owner of New York's Plaza Hotel.
Officials at the investment banks have not responded to requests for comment.
Elad, in partnership with IDB Group USA Investments Inc, a joint venture of Israel's Discount Investment Corp and its subsidiary Property and Building, purchased the 35 acres on the Las Vegas Strip in 2007 for a record-high price of $1.25 billion, or about $35 million an acre.
The partners announced plans to develop a Plaza-branded "$5 billion multi-use ultra-luxury hotel, private residence, retail and gaming complex." But a weak U.S. economy combined with a much tighter credit market has caused developers to reassess the need for more hotel capacity on the gambling corridor.
Elad has no plans to begin construction on the Las Vegas project -- the former site of the now-demolished New Frontier Resort & Casino -- before 2009, Tsang said.
Other projects also have been delayed: Boyd Gaming Corp (BYD.N) earlier this month halted construction of its partially-built $4.8 billion Echelon project on the Strip, citing an inability to arrange financing for two key joint venture segments of the project. (Reporting by Deena Beasley; editing by Carol Bishopric)
