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Unfinished Vegas Fontainebleau Casino Sold for $600 Million
- August 30, 2017 By Oliver Young -
Carl Icahn is one of the wealthiest men in America, but also globally. He is the founder and owner of multiple companies and he has bought countless businesses in the past. His net worth exceeds $16.5 billion which puts him in the top 30 on Forbes’ 400 list. Currently, Icahn is also a Special Advisor to President Trump on matters concerning regulatory reforms.
Icahn has also invested in the US gambling industry, but his actions suggest that this industry was never his primary interest. Icahn through his companies has bought numerous casino resorts over the years only to sell them at a higher price later.
Icahn’s Tropicana Entertainment was the last owner of the Trump Taj Mahal Casino before it was finally closed last year. Icahn was earlier interested in acquiring Sands Bethlehem Casino, but the two parties couldn’t reach an agreement. Then another casino giant, MGM was interested in buying Sands Bethlehem but that deal didn’t go through either.
Icahn Bought Fontainebleau for $150 Million
It has been announced that Icahn has just sold another casino, the Las Vegas Fontainebleau Casino. It is even more surprising that Icahn managed to cash in a total of $600 million, despite the fact that the casino is not finished yet. Development firms Witkoff and New Valley are the new owners of the casino. New Valley and Witkoff are owned by Vector Group, a large Florida-based holding.
Carl Icahn bought the casino site in 2010 for just $150 million. The site was owned by another billionaire, Jeffrey Soffer. The initial plan was to build a massive casino resort with almost 2,900 rooms, over a thousand condominium units, multiple restaurants and cafes. The casino area was supposed to be 100,000 square feet large. According to the original plan the resort was also supposed to include 180,000 sq. ft. of shopping space.
The ‘final product’ was supposed to be a casino resort worth just short of $3 billion, but the plan was never completed. The previous owner of the resort blamed the banking crisis of the early 2000s, claiming that this is why the property’s full potential couldn’t have been realised. Then the original owner filed for bankruptcy and the procedure lasted 4 years, from 2009 to 2013.
A very Profitable Deal
Icahn said that the location is a hidden gem and with the industry recovering from recession, it is clear that the new owners might be able to make things work. Icahn earned almost $400 from the deal, as he acquired the property for just $150 million.
Fontainebleau’s location is still the property’s biggest asset as it is located just across from the Convention Center which is going through a renovation process worth over $1.4 billion. Mr Icahn previously stated that his company is going to invest in the property but in the end he decided to sell, much like he did with the Atlantic City Trump Taj Mahal. The AC casino was sold less than two years after it was acquired, whereas it took Icahn seven years to sell the Vegas casino.