- 04 Sep
Unfinished Las Vegas Tower Purchased for $600M
A long-unfinished casino and hotel in Las Vegas was sold for $600M recently. The building had been nearly completed almost eight years ago until the housing crash put plans on pause.
The Fontainebleau Las Vegas tower was approximately 70 percent complete in 2009 after being started two years previously. The original design cost $2.9B and would’ve contained 3,900 rooms, including a 95,000 sq ft. casino, a 3,300 seat performing arts theater, and 24 different restaurants and lounges. It was intended as a sister property to the Fontainebleau Miami Beach hotel, a famous 1950s-era building.
The Las Vegas tower was begun in February 2007 by the privately-held Fontainebleau Resorts LLC and halted after the project fell into bankruptcy. It was purchased out of bankruptcy in 2010 by Carl Ichan and his firm for $150M, and primarily used as a training site for area firefighters. It remained empty for years until a partnership led by the Witkoff company in New York purchased the tower in August.
While specific plans for the building haven’t been unveiled other than an intended name change, the tower isn’t near the heart of the Las Vegas Strip and stands by another paused casino project which may hurt its chances for the future. As well, the estimated cost of finishing the tower is thought to be $1-1.5B. Analysts say that, if Witkoff decided to use the tower for its original purpose and open a casino-resort, the distance from the tower and other mainstays of Vegas, such as MGM or Caesars properties, may make it difficult to turn a profit. It may take years for a project of this size to turn a profit, and would therefore depend on how long its owners can handle a large piece of property losing money. Economists say other factors can influence the potential success of the tower, such as any short-term change in the national economy.
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