The Fontainebleau, the blue unlit building seen in the middle of this photo, on the Las Vegas Strip circa July 2013. Photo by InSapphoWeTrust via Flickr
By: John Joseph
Date: March 2nd 2015 03:42 PM
One of the biggest buildings in Las Vegas still sits on hold while its current owner decides what to do. Most observers believe that the current owner, Carl Icahn, is unlikely to open the property himself and will likely sell it once he receives an attractive offer. The $3 billion property which is about 80% complete was purchased by Icahn in bankruptcy court in 2009 for $150 million. It is estimated that the property would cost as much as $1 billion more to complete.
Carl Icahn is no stranger to the gaming industry. Previously he had interest in American Casino & Entertainment Properties the owner of Las Vegas gaming properties Arizona Charlie's and the Stratosphere as well as the Aquarius in Laughlin. Currently he is part owner of Tropicana Entertainment Inc. owners of the Tropicana Hotel & Casino in Laughlin, MontBleu Resort Casino & Spa in Lake Tahoe, and 6 other casino properties. The Tropicana Hotel & Casino in Las Vegas is unrelated to Tropicana Entertainment Inc. He is also involved currently with the Trump Taj Mahal in Atlantic City, New Jersey. The struggling Taj Mahal casino was given a $20 million cash infusion by Icahn to keep the property open while reducing expenses and working to cut the significant monthly losses.
Icahn's options for the Fontainebleau comedown to either completing the property or selling it off. Icahn is keen investor known for taking already established properties and making adjustments to increase the properties' value and income generate while then sell them later for a large profit. It would be highly unusually for him to sink a billion dollars into the property to complete it especially considering that even after $1 billion invested he would still be unlikely to sell it for more that it would cost to complete it. Therefore it is more likely that another ambitious gaming company or real estate developer will purchase the property from him and develop it themselves. Until now no one has offered him an amount large enough to make him part with the property.