70°F
weather icon Clear

Unfinished Fontainebleau on Las Vegas Strip becomes Project Blue

Updated December 13, 2017 - 7:12 pm

It has been more than three months since the Fontainebleau sold for $600 million, and there’s still no word from the buyers on what they will do with it.

But they’ve taken steps to resume construction and have a new name for the undertaking: Project Blue.

The Clark County Building Department issued permits in November for the mothballed hotel’s garage and a permit this month for a temporary trailer.

Contractor Penta Building Group was hired to finish the north Strip project, which is now being called Project Blue, county records show.

New York developer Steve Witkoff and Miami investment firm New Valley bought the partially built, blue-tinted tower on Aug. 29 from billionaire Carl Icahn, who acquired it out of bankruptcy during the recession for around $150 million and left it largely untouched.

In a news release announcing its purchase, Witkoff’s namesake company said it “identified numerous ways to unlock the significant underlying value of the property” but did not provide any details.

The new owners still haven’t announced plans for the tower, one of the tallest buildings in Las Vegas at 60-plus stories.

Efforts this week to speak with Witkoff and New Valley, a subsidiary of cigarette maker the Vector Group, were unsuccessful.

Penta’s marketing manager did not respond to a call and an email seeking comment.

‘Tight-lipped’

Jackie Robinson, developer of a planned arena and hotel project next to the Fontainebleau site, said he heard the new neighbors would resume construction next year.

Pathfinder Partners co-founder Lorne Polger, whose San Diego firm bought dozens of condos in the Sky Las Vegas tower across from the Fontainebleau two years ago, said he hasn’t heard what will become of the unfinished project.

“They have kept it pretty tight-lipped,” he said.

He figures there is enough demand for another high-end resort on the Strip and noted that just because the owners didn’t announce their plans doesn’t mean they don’t have any.

Polger also said that his own group, when it bought the condos, figured Icahn would tear down the Fontainebleau or sell it to buyers who would finish it. Either way, the eyesore would be gone.

It’s unclear how another megaresort would fare on the Strip. The SLS Las Vegas, which opened in 2014, has stumbled, with investors alleging it’s on the “verge of bankruptcy.”

Visitor levels also have dipped in Las Vegas this year. Some 35.7 million people visited Las Vegas this year through October, down 1.4 percent from the same period last year.

But room rates and gambling revenue are rising. The Strip generated $5.4 billion in gambling revenue in that time, up 2.6 percent, and the corridor’s average daily room rate, $142, was up 3.6 percent, according to the Las Vegas Convention and Visitors Authority.

Scrap the name

The Fontainebleau was envisioned as a $2.8 billion, 3,815-room project. The original developers broke ground in 2007, but the economy crashed and the project flopped, going bankrupt in 2009.

Since then, even as other failed projects in town were bought and finished, it has been a towering reminder of Las Vegas’ bloated real estate boom and devastating crash.

Michael Parks of CBRE Group, a former listing broker for the Fontainebleau, said the Strip could handle a big influx of hotel rooms. As he sees it, the corridor is ready “for a new resort or two to open up.”

He also said the Fontainebleau’s new owners don’t have concrete plans and believes they’re looking at a number of options.

There has been talk that Witkoff’s group would look to rebrand the tower, possibly as a Marriott. The hotel giant does not “have any information to share at the moment,” spokeswoman Connie Kim said Wednesday.

But at least one thing seems certain: Parks said the new owners are ditching the old name.

In its news release on the sale, Witkoff’s firm said the hotel was “formerly known” as the Fontainebleau and referred to it by its address.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
How much do Las Vegas casino CEOs make?
Las Vegas gaming CEOs made anywhere between $1 million and $24 million last year, according to company filings with the U.S. Securities and Exchange Commission. ((Las Vegas Review-Journal)
30-year-old Rio needs a little TLC
Nearly 30 years after the Rio opened, the red and blue jewel that helped catapult Las Vegas to a new level with its buffet and nightclub has lost its status along with its shine.
The latest on the Drew Las Vegas - VIDEO
Eli Segall recounts his tour of the Drew Las Vegas, formerly the Fontainebleau, on the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
Pinball Hall of Fame to move near south Strip
Operators of the Pinball Hall of Fame have been approved to build a new, larger arcade near the south edge of the Strip on Las Vegas Boulevard near Russel Road. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
National Hardware Show underway Las Vegas
The National Hardware Show kicked off Tuesday at the Las Vegas Convention Center (Mat Luschek / Review-Journal)
Caesars for sale?
Caesars Entertainment Corp. has been swept up in takeover speculation since the company’s share price tumbled last year amid disappointing earnings and concerns over a recession. Amid the decline, hedge funds scooped up shares. Billionaire activist investor Carl Icahn began buying shares of Caesars as early as January. Icahn acquired nearly 18 percent by mid-March. In February Icahn called on the Caesars board to study a sale as a way to boost shareholder value.
Las Vegas home prices
Las Vegas home prices grew fastest among major markets in February for the ninth straight month. But amid affordability concerns, the growth rate has slowed down. Southern Nevada prices in February were up 9.7% from a year earlier, according to the latest S&P CoreLogic Case-Shiller index. The last time Las Vegas' price growth fell below 10% was in September 2017, S&P Dow Jones Indices reported.
Free Parking Coming To Wynn
Free parking will come to the Wynn and Encore resorts on May 1, 2019. (Mat Luschek / Review-Journal)
Founding Venetian employees talk about 20 years at the Strip resort
The Venetian, which opened May 3, 1999, is celebrating 20 years on the Las Vegas Strip. Seven original employees talk about opening the luxury resort and working there for two decades. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
THE LATEST
 
Plenty of work remains on Drew Las Vegas

The former Fontainebleau — the blue-tinted tower that has blighted the Strip for a decade — is slated to open as the Drew in the second quarter of 2022.