Et tu Fontainebleau?
April 24, 2009
Oh dear God Mother of Moses, here we go again …
Fontainebleau
Fontainebleau
Fontainebleau
Fontainebleau
Fontainebleau
Fontainebleau
Fontainebleau
Fontainebleau
The much anticipated (by me at least) Fblue project is, and I quote “doomed to failure” unless they get $800 Million, which they were apparently promised in some capacity.The press release says that their $800 Million “revolving loan facility” was “cancelled”.
For us little people, “revolving” loans are usually called “credit cards” and “cancelled” means … well, cancelled.
Unlike the little guy, however, Fontainebleau Las Vegas LLC is not taking this lying down. They have filed a $3 Billion lawsuit in Clark County District Court alleging that the banks “violated their obligations”.
The Fblue is also making some allegations involving the TARP funds which were given to such banks as evidence that the banks are … well … greedy assholes.
Of course, this is like asking a judge to declare the sky … blue, and grass … green, but my guess is that invoking TARP will garner some public outcry over the cancellation of the funds.
This whole development is somewhat of a coincidence, because I met with some visitors yesterday, and we got into a short conversation about just this property. One of the folks opined that it would actually be more important than City Center, and to a large extent, I agree. At the time, a mere 16 hours ago, we had no idea that this news was coming.
Obviously, the resort will not open without this money, but what else happens if this money is not made available fairly quickly?
Over 3,000 constructions workers will lose their jobs, and 6,000 people who expect to have jobs late this year, will not.
Damn, just … damn.
This could be huge, kids. As I recently posted, the Fblue is massive, and it will not just be part of the North Strip. It will more or less be the North Strip. If this project gets mothballed, The Strip will officially be anchored by Encore, and it will be essentially cut in length by 1/3rd. I love the Sahara, Riviera, and Stratosphere … and Circus Circus has its place … but these places are going to have to survive on their own along a fairly bleak and depressing stretch of road if the Fblue pulls an Echelon.
Echelon Place
Echelon Place
Every single solitary time I pass Echelon, I mourn what has become of the north side of Las Vegas Boulevard. Then, to console myself, I quickly turn around and look at the promising 700-foot tower just two hundred yards away. Yes, it is of some consolation. Of course, there are two sides to every story. Some in Las Vegas have already opined that this is great news for the town. The theory is that with the current economy, the opening of the Fblu would hurt existing properties by providing more rooms to an already troubled Strip which cannot fill rooms as it is.
I do not share this view. This town needs competition as badly as it needs T&A. We need new properties that don’t fly under the MGM or Harrah’s flag. We need to excite people, because I need to tell you something … the “eat-all-day” buffet at the Excalibur just isn’t doing it.
Sure, some properties will suffer if the Fblue opens, but this will simply mean that they will have to adjust with better service, comps, or offers.
The people who are saying that the Fblu would put a burden on Las Vegas, are the people who would not be able to compete. Personally, I would like a 20” iMac in my room. Other properties could do the same, if they wanted too. 3,000 iMac’s with a discount would be a three million dollar investment for a property. Make it happen. Throw in free internet access, and you’ve given people a reason to stay with you.
Sitting back and hoping the competitors die is lame in my opinion. That mentality is what got us where we are today.
In any event, this is where we now stand. The Fblue is looking down the business end of a double-barreled shotgun, and everyone who cares about this project is holding our collective breaths. I live quite close to this property (I am looking at it as I type this), and I can tell you that myself and my neighbors are extremely concerned about this turn of events. Our proximity to the project was actually seen by many as a salvation to our local property values. It will have a financial impact on myself and others nearby. It was seen as a shot in the arm to the neighborhood, and rightfully so.
While tourists the world over may be looking at this debacle with curiosity, and will no doubt have their own opinions and pontifications about its fate … it takes on a completely different life when the thing is in your backyard.
Obviously, the thousands of employees and construction workers are even more affected than anyone else, and I think I speak for many people when I say that I very much hope that they are able to procure financing to finish the project.
Being a realist, I expect the worst and hope for the best.
Unfortunately, for the last few years, the former has been happening with far more frequency than the latter.
(All of the photos on this page were taken within the last few days, and therefore represent the current physical state of the property.)
Written by james on April 24, 2009 at 11:39 am
from a selfish tourist point of view, who visits lv every few months, i think it would be to the tourist advantage to finish center city more than f blu….center city is centrally located and as it sits now is creating a big hole in the middle of the strip…the location of f blu is too far out of the loop, and even if finished is going to be too isolated for most tourist….center city is in the middle of the action, and with its unique architecture it will be a tourist attraction in its own right. i dont think the room rates will fall much more, at some point, theres just no point in renting them at all…the hotels should take back the resturants and night clubs and shows and use them as comps for hotel guest…..locals probably see this differently, but its how the tourist sees it thats the most important to las vegas….as it turns out the tourist is more important than the smug lv local thought……after all its not the locals who are staying and playing at the strip properties, its the tourist, and if you took a poll i bet the tourist would want center city finished first…just my thoughts….remember, as tourist we dont really care who owns the properties, or who has what job, or for how much…all we care about is , did we have a good time…thats what important to us…and i would have a better time if i didnt have to walk past a half finished center city…keep up the good work rex, love your columns!
Written by Chuckreis on April 24, 2009 at 12:33 pm
Speak for yourself. The All Day Buffet at Excal is the reason I will be back to Vegas this year.
Written by robert on April 24, 2009 at 1:25 pm
I predict success for the FBlue for the following reasons. First, the lenders have a tremendous amount at stake already. They need to get FBlue up and running with a positive cash flow, so they can get paid back. Currently, they are negotiating for higher rates or an equity share. But the last thing that anybody wants is to mothball it — it’s too far along. Second, there is a need for a big property ( like the old Stardust) that caters to the middle income tourists. Many of us who fall in that group want to “stay and play” in a place where we think that we are appreciated. I am a tourist, who visits Las Vegas about three or four times per year. I recall one visit seven or eight years ago when I flew into Vegas about 10 p.m. on a Thursday evening in August and caught a cab to the Orleans. Please recall that this was when the Orleans had great video poker. Well, I “stayed and played” until I took a cab to the airport before dawn on a Sunday morning. When I returned home somebody asked me about the heat in Las Vegas that week. I told them that it was not hot at all. Then I realized that I had never once been outside in the light! Everything I wanted was inside the Orleans! Anyway, once somebody opens a place like that again with 3/2 BJ, 10/7 DB and a positive vibe, you’re going to see big crowds again! Thanks for your posts. You go places that I have been reluctant to approach!
Written by BigLouie on April 24, 2009 at 1:50 pm
DAMN, damn, damn, they were so close to the October opening too. That sucks. Should have known somehting was up with LV when the Hooters Casino went belly up. Damn!
Written by briguyx on April 24, 2009 at 3:43 pm
Even if the FB gets off the ground, how will they market it? I bet most tourists coming to Vegas have never even heard of it. I don’t think the fame of the FB in Miami means much here on the West Coast. If they’re going for glamor, why would the well-off stay there and not Bellagio or Wynn?
And as much as free internet means to Rex and business travelers, that’s not why I go to Las Vegas. I go for fun in the sun and dancing at night. So the FB better not have skimped on the pool area or they’ll be dead in the water!.
Written by Jinx on April 25, 2009 at 3:47 pm
I think it’s going to get done, based on what I’ve read. And I’m happy to see some more competition too, PH has shown that you can be outside of MGM or HET on the strip and have a ‘nice’ property. I do fear that the F’Blu folks aren’t going to get it though when it comes to the casino customer. I think they are going to have their eyes and prices set on 2007-2008 levels and without a book of casino customers and a horrible for them (not for the strip) spot, I just don’t know if they are going to attract the price level I think they will shoot for.
Not to mention, that many times when on of these non casino companies open a property or buy one, inevitably they stumble at first in understanding their market, heck seasoned operators have done that too, so I’m hopeful the F’Blu will sustain, but I fear that it’s not going to be under the current ownership within 5 years.
Written by vern on April 28, 2009 at 3:36 am
i wish they would have made the outside skin of the FB different, to me it looks like a hugh office building that i would find downtown Detroit. They should have made it more appealing like the Bellagio or the Wynn. it is bad enough when i drive down the strip from the airport i have to see Trumps big gold piece of crap ruining the Vegas skyline now there is a big blue colored piece of crap too.