The Fontainebleau Las Vegas' dispute with banks has led to layoffs at the corporate level that began Monday, a spokesman for the project said.
The developer of the $3.1 billion project began laying off as much as 25 percent of its remaining skeletal work force Monday with more cuts likely this week, according to people familiar with the situation.
While the exact number of the corporate layoffs is not known, people familiar with the project said between 160 and 175 people were employed before the layoffs began.
“This is the inevitable conclusion once the banks pulled the funding,” said Dave Satterfield, spokesman for Fontainebleau.
Fontainebleau’s attorneys filed a $3 million lawsuit April 23 after a group of banks led by Bank of America pulled $770 million in financing after saying the project had defaulted on a loan.
Project officials insist no default has happened.
An amended lawsuit filed last week accused Deutsche Bank, which controls $80 million of the $770 million disputed loan, of a conflict of interest because of the bank’s ownership of the $3.9 billion Cosmopolitan project a half-mile south on Las Vegas Boulevard.
This week’s layoffs are the first at the corporate level since the dispute began. Construction on the 24-acre site, however, was slowed with the great majority of the 3,300 construction workers on the project laid off.
Monday’s cuts came in information technology and sales and marketing, according to various sources.
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.