Billionaire investor and casino owner Carl Icahn said on Wednesday that he had hired Los Angeles real estate company CBRE Group to sell Fontainebleau Las Vegas, an unfinished hotel and casino resort located on the northern part of the Las Vegas Strip.
Fontainebleau Las Vegas was a $3-billion project but never got finished due to financial issues. Mr. Icahn bought the unfinished resort back in 2010 for the amount of $150 million. CBRE said on Wednesday that the property is likely to be sold for about $650 million.
Commenting on the latest announcement, Mr. Icahn said that Las Vegas and the Strip in particular still have a lot of room to run. However, the businessman noted that he prefers selling that room than building it out.
CBRE Executive Vice President John Knott said that whoever buys the unfinished hotel and casino complex will have to cope with much more than the acquisition costs. The project, which spreads on a 22-acre parcel of land, had been two-thirds completed before sold to Mr. Icahn. The completion of the venue could cost more than $1 billion.
Prior to being sold to Mr. Icahn, Fontainebleau Las Vegas was planned to feature a total of 2,882 hotel rooms, more than 900 condos, large retail space, etc. The casino had formerly been owned by Miami-based real estate developer Jeffrey Soffer. He had invested $2 billion in the ambitious project. However, it ran out of money at some point and the owner had to file for Chapter 11 bankruptcy protection back in 2009.
As mentioned above, Mr. Icahn purchased the property out of bankruptcy in 2010. Since then he has annually spent up to $7 million on maintenance costs.
Analysts commented that the sale of Fontainebleau Las Vegas could contribute to the revitalization of the Strip’s northern end. Not much has happened there in recent years. Many pointed to the limited foot traffic as the main reason for this.
However, it seems that developers are interested in that part of the Strip, despite its being quite stagnant over the past several years. Earlier this year, Malaysian hotel and casino developer and operator Genting Group broke ground on what would be a $4-billion Chinese-themed integrated resort at the site of the unfinished Echelon Place casino. Genting acquired the land for its complex in 2013 from Boyd Gaming.
In addition, Australian casino mogul James Packer and his partners are planning to establish a new gambling venue in the northern end of the Strip at the site of the former New Frontier Casino.
