Carl Icahn Sells Unfinished Fontainebleau Casino for $600 Million

New York real estate investor Carl Icahn unloaded another casino property after the sale of the shuttered Trump Taj Mahal resort this spring. The businessman confirmed on Tuesday that he entered an agreement with real estate investment and development firms Witkoff and New Valley, owned by Vector Group, to sell the unfinished Fontainebleau Las Vegas for the amount of $600 million.

Mr. Icahn purchased the site of what had formerly been referred to as Fontainebleau back in February 2010 for $148 million. The property was previously owned by billionaire Jeffrey Soffer. According to original plans, the Las Vegas Strip-located Fontainebleau casino resort was to feature nearly 2,900 hotel rooms, more than 1,000 condominium units, different food and beverage facilities, a 180,000-square-foot retail facility, and a nearly 100,000-square-foot casino, among a number of other options.

Originally planned to be a 68-story hotel and casino resort with a $2.9-billion price tag, it was never completed. Its former owner, Mr. Soffer, blamed the banking industry’s struggles in the late 2000s for their failure to untap the property’s full potential. Fontainebleau’s original owner filed for bankruptcy protection in 2009. The filing resulted in bankruptcy proceedings lasting several years. It was eventually in 2013 when a $178-million-worth settlement was agreed upon with creditors

The Fontainebleau site is located on the Las Vegas Strip, right opposite to the Las Vegas Convention Center. The latter is undergoing a massive renovation, which is planned to cost more than $1.4 billion.

The purchase deal allows Witkoff and New Valley to enter the Las Vegas market at a time when the city is recovering from its Great Recession woes. With its Strip location and its investment potential, Mr. Icahn’s firm Icahn Enterprises called the property a “hidden gem” in a statement on the latest deal.

The Trump Taj Mahal Sale

Fontainebleau has not been the only casino property Mr. Icahn has offloaded this year. The businessman announced in early 2017 that he intended to sell the shuttered Trump Taj Mahal. The announcement came almost two years after the Mr. Icahn purchased the ailing property barely saving it from bankruptcy.

Although he planned to invest more than $200 million in Trump Taj Mahal’s revitalization, a prolonged workers’ strike that took place last summer changed the businessman’s plans. It was announced last September that the casino, which had once been dubbed the eighth wonder of the world by none other but US President Donald Trump, would be shuttered. The casino resort closed doors in early October.

In his statement from February, Mr. Icahn expressed disbelief that he would find interested buyers quickly, but he was proved rock. Florida-based casino and café chain owner Hard Rock International immediately emerged as an interested buyer and bought it for an undisclosed price. The company now plans to redevelop the complex into a Hard Rock casino resort and to reopen it next summer. It will invest around $500 million in order to complete the project.

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