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Best of Howard Stutz

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Howard Stutz
 

Icahn officially the unfinished Fontainebleau's owner

22 February 2010

LAS VEGAS, Nevada -- The Fontainebleau is no longer bankrupt.

Billionaire corporate raider Carl Icahn completed a $150 million purchase of the unfinished Strip development late Thursday. Icahn, through New York-based Icahn Enterprises, paid $106 million for the 3,889-room project and $45 million in financing fees during bankruptcy proceedings.

"The acquisition of the Fontainebleau property was a great opportunity to purchase a distressed asset that I believe has considerable value," Icahn said in a statement.

The Fontainebleau property includes a hotel tower and building totaling 7 million square feet that sits on 25 acres at the northern end of the Strip.

Construction stopped on the Fontainebleau last April when lenders cut off $800 million in financing.

The project, which was 70 percent complete at the time, once had a construction budget of nearly $3 billion.

Icahn told the Review-Journal last month that would most likely wait for an uncertain amount of time before he would consider restarting the project.

"We've always liked Las Vegas, but it's probably overbuilt a bit too much," Icahn said.

Icahn emerged as the only qualified bidder during proceedings in U.S. Bankruptcy Court in Miami in January after regional casino operator Penn National Gaming dropped out of the process.

The project was originally developed by Jeffrey Soffer. Banks and other financial institutions who lent money for the Fontainebleau could lose most of the $2 billion already spent on construction.

Penn National officials thought it would take more the $1.5 billion to complete the resort.