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Unfinished Las Vegas Strip Casino Sold For $600M

Billionaire Carl Icahn Unloads Casino-Hotel To Investment Firms

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Atlantic City casino owner Carl Icahn is selling the unfinished casino known as the Fontainebleau, his holding company announced Tuesday.

Icahn Enterprises L.P. will turn over the Las Vegas Strip property for $600 million to investment firms The Witkoff Group LLC and New Valley LLC. Icahn has owned the property since acquiring it through its bankruptcy for $148 million in 2010.

“We are pleased to announce the sale of the Fontainebleau, which was one of Icahn Enterprise’s hidden gems," Icahn said in a statement. Icahn said he acquired the asset “when others were unwilling to invest,” adding that his company came out more than $450 million ahead from the sale.

Witkoff and New Valley were happy with the price, calling it “a significantly undervalued resort hotel.” They added that it was “acquired at a substantial discount to replacement cost,” meaning that it’s significantly cheaper than building a new Las Vegas casino from the ground up.

The Fontainebleau project was announced in 2005. Construction kicked off in February 2007, but later the Great Recession struck, slashing gaming revenues for Las Vegas. The project was halted in 2009. It will cost an estimated $1.2 billion to finish the project.

“This successful investment is an example of our ‘contrarian’ modus operandi, which seeks to invest in undervalued assets and businesses, nurture, guide and improve their condition and operations, and ultimately sell them for large gains,” Icahn said.

The casino-hotel, which sits on a site formerly occupied by the El Rancho Hotel and Casino and the Algiers Hotel, will likely be renamed. Plans for finishing the project haven’t been announced.

“2755 Las Vegas Boulevard South is one of the best physical assets in the country, which is one of the reasons we were attracted to it,” Steve Witkoff, Chairman and Chief Executive Officer of Witkoff, added in a statement. “The resort is ideally located on the Las Vegas Strip, directly across from the Las Vegas Convention Center."

Icahn Enterprises has interests in a wide range of industries in addition to gaming, including automotive, energy, metals, railcar, mining, food packaging, real estate and home fashion.

 
 
Tags: Fontainebleau,   The Drew,   Strip,   Las Vegas,   Nevada