Talking about the Fontainebleau and gaming expansion…Gaming Control Board Chairman A.G. Burnett was saying he’s heard “rumors” but nothing that projects the sound of certainty.
I asked him last week about the abandoned 68-story wanna-be resort on the Las Vegas Strip that is something of an “exclamation mark” to countless tales of recession-related shortcomings.
The collapse of Lehman Brothers in 2008 brought the Las Vegas project to a screeching half as financing from the Wall Street investment banker disappeared. A bankruptcy filing followed in 2009 and Carl Icahn bought the unfinished structure at a bankruptcy sale in 2010 for $93 million, perhaps imagining it could quickly be sold.
But it wasn’t. Icahn may have shrugged it off and gone on to other bigger deals but a lot of Las Vegans were left wondering, now what? A question to which Icahn might have responded, “Finishing it is not my job, all I did was buy it.”
Until someone puts a plan on the table, a proposal that requires Control Board action, Burnett and his staff will remain interested spectators to the lack of action at the project that was once envisioned as a Las Vegas address for one of the world’s best known resort hotels.
No one imagines the structure occupies a priority spot on Icahn’s things-to-do list. Rumors about pending deals have occasionally bubbled to the surface of things, but they are nothing new on the Las Vegas Strip. Rumors can blaze a bright path through lunchtime conversation and then crash and burn by the end of the day.
One of those rumors of some months ago had the Fontainebleau and the Cosmopolitan being eyed by a shopper who supposedly wanted them both. Another rumor suggested Melco Crown principals Lawrence Ho and James Packer were interested.
The lifespan of a rumor does not require a lot of facts.
I wondered if those “rumors” had anything to do with current efforts to bring new casinos to the south Florida areas near Miami Beach where the original Fontainebleau became a tourism magnet with International appeal a half century ago.
The Miami Beach Fontainebleau is listed as one of the entities backing the annual revival of hopes for South Florida development plans that could include at least a couple mega-resorts. They would draw well-heeled tourists in that direction.
Those hopes might mean something to helpful marketing scenarios for a Las Vegas project, assuming Florida plans muster sufficient political support to blossom into a developer’s view of reality.
But the opponents of expanded Florida gaming of any kind are clearly not conceding ground. Disney and the Florida Seminoles, who own Hard Rock casinos near Tampa and Fort Lauderdale – they are among the busiest and most profitable casinos in the country – have enough money for campaign donations to keep the attention of politicians.
Pro-expansion forces are also hampered by long-standing conservative tendencies among lawmakers who control the legislature. Another interesting strategy: Forces responsible for House and Senate gaming bills in Florida have tossed out some proposed fees and tax levels that can be counted on to have possible developers saying thanks but no thanks.
Florida already has more commercial gambling than most states, but you’d never know it to listen to the babble coming from expansion opponents who act as though the so-called family appeal of the state’s existing tourism industry is something that should not be disturbed.
The mom and pop nature of the existing tourism industry will also continue to be a tough sell. Lots of small businesses are doing well enough that they see nothing to be gained by opening the door to major resort development.
I grew up in Sarasota, Fla. My first newspaper jobs were there. I recently returned for a visit of several days. The Siesta Key house that my family occupied during my grade school days still exists, to my surprise, but it and others have become restaurants, bars and souvenir shops serving what appears to be a booming tourism trade.
Traffic with a lot of out of state license plates was so heavy I could not find an illegal place to park in my old neighborhood.
I’m not surprised so many Las Vegas-based developers have been turning their attention elsewhere…to Japan. The price tags will be high but so will the likely profits. I’m betting a Tokyo casino opens before Florida gets around to stripping the Seminoles of their monopoly.
Maybe they will take a serious look at Icahn’s big blue exclamation point.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected].