Elad Group, the owner of New York’s Plaza Hotel, said it will develop a $5 billion luxury property on the Las Vegas Strip.

The company bought the 34.5-acre site for $1.2 billion and plans to demolish the New Frontier & Casino, which currently occupies the site, and replace it with the Las Vegas Plaza. Elad, a closely held commercial real estate development firm, said in a statement today it expects the hotel to open in 2011.

The site is the “last available prime parcel” on the Las Vegas Strip, the city’s main casino corridor, Elad said. Companies have been buying older properties on the strip and replacing them with more elaborate resorts, including Wynn Resorts Ltd.’s $2.7 billion Wynn Las Vegas.

“Las Vegas is the No. 1 tourist destination in America and it continues to grow,” an analyst covering hotels and casinos at Susquehanna Financial Group in Stamford, Conn., Robert LaFleur, said. “People can make a lot of money owning and operating a casino on the Las Vegas Strip.”

Casinos there reported a record $6.69 billion in gambling revenue in 2006, an 11% increase from a year earlier, according to the Nevada Gaming Control Board.

The Las Vegas Plaza will be across Las Vegas Boulevard from the Wynn Las Vegas, which is expanding with the $1.7 billion Encore, and south of the site where Boyd Gaming Corp plans to build its $4 billion, 5,000 room Echelon Place.

Elad is paying approximately $33 million an acre for the Frontier, an investment banker with Los Angeles-based Innovation Capital, Matt Sodl, said.

“Las Vegas is the No. 1 tourist destination in America and it continues to grow,” an analyst covering hotels and casinos at Susquehanna Financial Group, Robert LaFleur, said. “People can make a lot of money owning and operating a casino.”