The Las Vegas Sun is reporting that $1.2 billion in construction permits for Fontainbleau were pulled earlier this month.
The permits listed a variety of projects, including casino, hotel and restaurant remodelings, miscellaneous commercial structure work and parking structure modifications.
All the permits were issued June 10 and the total value of all 47 permits exceeds $1.2 billion.
Representatives of Icahn Enterprises and Taylor International did not return calls clarifying whether there are any plans to resume construction at Fontainebleau..
I’m not sure that the market needs more room supply, but there may end up being room for Fontainebleau. Carl Icahn seems to keep his hotel and casinos in the mid-level price range. Most of the new casinos/hotels built over the past few years are high end, so Fontainebleau wouldn’t likely be direct competition.
This looks to be a forward looking move as construction likely wouldn’t be finished for another 18 months or so. I wouldn’t imaging construction would start in the summer, but ya never know.
Carl Icahn is the winner for the bankrupt Fontainbleau in Las Vegas.
Carl Icahn is expected to take over ownership of the bankrupt Fontainebleau Las Vegas resort after two potential competitors vying to buy the property failed to submit qualifying bids as of a 5 p.m. deadline Friday.
First things first. I hope Carl Icahn unbrands the Fontainebleau name. Second, I’ve mused about Icahn moving the Tropicana name over to the Fontainebleau project. With the Tropicana going with a south beach theme it may make sense to switch brands with hotels as Fontainbleau was originally a Miami hotel icon.
Penn National Gaming made the first bid for the stalled Fontainebleau project in Las Vegas. They offered $50 million for the casino that was valued at almost $3 billion. About $1.5 billion has already been put into building Fontainbleau. Penn National would still have to pay for the rest of construction, but this is a start.
Penn National Gaming Inc. on Monday made a $50 million “stalking horse” bid to buy the stalled Fontainebleau casino-resort in Las Vegas, with plans to spend another $1.46 billion to complete the project.
This is only the first bid and I have been reading rumors about other companies that may be making bids. Nothing would surprise me with this casino. The property may, alone, be worth more than $50 million. The promise here is that the project will be completed. I’m not sure that every bidder would complete the project as it stands.
There is a couple of months until bidding is up. I’m sure this isn’t the last we’ll hear about this casino with a name I’d love to never write again.
Fontainbleau in Las Vegas still is not finished being built. There have been reports of Penn National trying to buy the unfinished casino hotel on the cheap. The casino is said to be about 70% complete – mostly the shell from what I can tell. Here is a long video showing the current state of the building.
Vegas Tripping found some renderings of possible restaurants if Fontainbleau; which include Burger Bar and Saddle Club. Check out the story for pictures and details.
The recession has hit Las Vegas hard as most readers of ECG know. The economy may turn around next year, but that may not change things much in the casinos of Las Vegas. With all of the building in Las Vegas over the past few years there should be a deluge of hotel rooms on the market next year.
In their reports, debt analysts at Deutsche Bank and CreditSights zeroed in on the impending flood of new hotel rooms on and near the Las Vegas Strip — a market struggling with an oversupply of rooms, slot machines and gaming tables.
“The challenge for the casinos will be to maintain hotel occupancy even as new supply is brought on over the next 14 months,” CreditSights said in its report.
Even without taking into account the 3,815 rooms at the stalled and bankrupt Fontainebleau resort, analysts say new rooms coming online at CityCenter and elsewhere will pressure the Las Vegas industry.
CreditSights noted that lower room rates are helping to fill Las Vegas hotels, but sales of condominium units on and near the Strip have come to a near standstill with 2,200 vacant units on the market.
Simple economics says that if supply is greater than demand then prices will fall until demand increases. Las Vegas isn’t like the rest of the world. Casinos can offer a variety of different comps to keep room rates relatively stable, but in general if you search for a cheap room in Las Vegas this year and next you should find it.
I typically try to treat myself to a little luxury when I take trips to Las Vegas. I’m curious to see how this effects the higher end hotels.
Fontainbleau filed for voluntary chapter 11 bankruptcy protection yesterday. Construction has been marred by financial problems for the past couple of months and this continues the Las Vegas projects regression to completion.
“The decision to file for Chapter 11 was the direct result of certain lenders having refused to honor their contractual commitments to provide nearly $800 million in construction funding for the $2.9 billion resort-casino project, which is 70 percent complete,” the company said.
“It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work,” said Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas. “Our goal now is to secure funding to complete this world-class project and restructure our existing debt.”
I still think that this doesn’t mean that the casino hotel won’t be completed…some day. Obviously things will continue to be delayed, but I can’t imagine that a business this close to completion won’t open. We’ll just have to wait a little while.