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Fountainebleau Casino-Hotel Vegas in the Red Before it’s Built; Property is Up for Bids

I used to live in South Florida (around Palm Beach) so I was not at all surprised to hear about the latest goings on with the Fontainebleau group’s Las Vegas Casino property.

In fact, the group is about to auction off the Vegas property with a bid that literally amounts to pennies on the dollar. This, for the bankrupt (and unfinished, I should add) casino hotel.

The remainder of this report comes from information culled from the Miami Herald and Fort Lauderdale Sun Sentinel.

Penn National Gaming has offered the Fontainebleau less than $300 million for it’s Vegas property. The thing is, about $2 billion has already been spent on the project. This, from a release by Scott Baena, a Miami bankruptcy lawyer representing the Vegas Casino.

Penn will bid less than $300 million.

An appraiser has set the value of the current construction site at less than $400 million.

Other bidders could offer more than Penn. “It’s only the start of the process,” Baena explained.

Penn is a publicly traded company based in Pennsylvania. It owns 11 casinos across the country. The Fountainbleau would be its first Vegas property.

Construction overruns and a collapsed Vegas condominium market foiled financing plans for the $3 billion Vegas project, and banks cut off $800 million in funding this spring. That forced the June Chapter 11 filing.

The Miami Beach property is not part of the Vegas bankruptcy.