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Gaming Guru

Eric Hartley
 

Fontainebleau owners agree to cover eyesore

5 November 2015

The owners of the Fontainebleau agreed Wednesday to cover up the rusty side of the unfinished resort, which has been an eyesore on the Strip for six years.

The agreement came after Clark County Commissioner Chris Giunchigliani threatened to use a procedural move to force building owner Carl Icahn to do expensive upgrades to the surrounding area.

According to a deal unanimously approved by commissioners at a public meeting Wednesday, the Fontainebleau will get an "exterior aesthetic upgrade" on the west side, which faces Las Vegas Boulevard.

Though the building is 68 stories high, the worst-looking parts are close to ground level. So the side will be covered with a combination of paint and fabric from the ground up to 100 feet.

An architect will submit plans within 90 days, and the work — at Icahn's expense — should mostly be done by mid-2016.

"We are thankful to (Giunchigliani) for working with us to work out a solution to this issue," Ed Garcia, a lawyer for Icahn, told commissioners during a brief hearing.

Garcia declined to comment as he left the meeting. Icahn, a billionaire investor who spent $150 million to buy the Fontainebleau out of bankruptcy in 2010, did not return a call to his New York office this week.

After the meeting, Giunchigliani said the agreement is "a good start." But she is frustrated — and puzzled — that it took so long to get Icahn and his partners to act.

"It's their property value that comes into play as well, and anything that can help that north end of the Strip and the the value of the property, I would think they'd want to do," Giunchigliani said.

The Fontainebleau was planned to be a $3 billion, 3,800-room hotel-casino. But the development went bankrupt in 2009, when it was 70 percent finished.

Little has changed since Icahn's 2010 purchase, except last year's removal of a construction crane. It's widely expected Icahn is simply waiting to flip the land for a profit that satisfies him, after which the Fontainebleau will be demolished.

In the meantime, the building's skeleton just sits: an "empty, gaping mouth that faces the Strip," as Giunchigliani put it.

And it's not illegal to be ugly, so the county can't technically force changes at the site as long as it remains safe and fenced off.

But Giunchigliani, who's been working on the issue for years, gained some leverage when Icahn's holding company, Icahn NV Gaming Acquisition LLC, applied for an extension of the time it has to do offsite work such as sidewalk widening and lighting.

County staff denied the request last year, and Icahn appealed to the commissioners. If commissioners also had voted to deny, the county could have had the offsite work done using money the owners already set aside to pay for it. That would have cost Icahn more than the wrap.

The math gave Giunchigliani the leverage to make a deal: Agree to cover up the building and get the extension. Commissioners OK'd the extension as part of Wednesday's deal.

The details of the Fontainebleau's wrap are still to come, but a similar one over the half-built St. Regis condo building between the Venetian and Palazzo cost $1 million when it was put up in 2011.