Africa Israel leads $650m Vegas deal.

Just weeks after the Edge Group pulled the plug on its mixed use W Las Vegas project, Africa Israel, USA, has swooped in to purchase the 60-acre site in a $625 million deal with Guiseppe Cipriani, Steve Witkoff and Credit Suisse First Boston.

The company, owned by Israeli diamond magnet, Lev Leviev, has a 50% stake in the deal to turn the site into a "city within a city" catering to an elite crowd, according to Rotem Rosen, CEO Of Africa-Israel in the US.

"The W Hotel plans were canceled by the previous owners, and that's where we came in. It's a substantial amount of land and we will create a town inside a town," said Rosen.

"Today, people don't want to be on the strip where it's hectic. We are going to create a new scene that is very high end, very chic, that will allow people to come to a village inside Las Vegas that they won't want to leave."

While the master plan is still on the drawing board, Rosen said the partnership will build a convention center that will carry the name Cipriani, five boutique hotels, a large casino servicing each of the hotels, as well as a very high end retail center. There may also be a small residential component, he said.

While the much heralded W project was ditched amidst spiraling costs and reports of poor relations among the partners, that included Starwood Hotels and Resorts, Steve Witkoff, CEO of the Witkoff Group, said that unlike the previous owners who planned over 3,000 condos on the site to finance much of the other development, the Africa Israel venture has the capital to build without a condo component doomed to fail in a cool residential market.

"We closed this transaction on a conservatively leveraged basis because we wanted to avoid putting too much debt on the property and having an interest rate gun at our heads," said Witkoff. "We don't need to sell condos to get the project done."

Like Cipriani and Africa Israel, this is Witkoff's first venture into Vegas territory, although he revealed he has been actively looking for the right opportunity for the past three years.

"We weren't ever able to identify a swathe of land in Las Vegas that made sense. We have finally been able to buy a piece at a price per acre that makes sense. We paid $10 million an acre in a market where land is trading at $20-30 million and we have a site just off the Vegas strip with full entitlements for a full-scale casino and resort facility."

Rosen added that the group was very excited about the venture and confident it will cater to a growing demand within the Las Vegas market for more upscale services.

"What we are going to sell here is a lifestyle," said Rosen. "People don't want to go to a 4000-room hotel, they want to be treated as individuals. Bringing the concept of boutique hotels to Las Vegas will allow people to get more individual treatment.

"Each member of the joint venture brings a different type of synergy to the partnership. Cipriani brings his brand and world quality restaurant and food service, Credit Suisse has an excellent financial background, Steve Witkoff is a real estate pioneer and Africa Israel brings its development and construction expertise.'

Since the beginning of the year, Africa Israel has spent over $1 billion buying up trophy properties across the US, including the old New York Times Building on West 43rd Street. It also has major development projects in the pipeline in Myrtle Beach, SC, and Pheonix, AZ.

And the company's not done yet, according to Rosen.

"Africa Israel continues to see great investment opportunity not only in the New York City market but across the country as well. We will continue expand and seek out other opportunities."