It seems the Fontainebleau can't catch a break these days.
First heavy rains made the ceiling cave in, and now its Vegas brother is going bust.
But as the Chapter 11 ink on their $3 billion Vegas project still dries, the fancy hotel empire insists that their Sin City problems won't affect operations in Miami.
"Fontainebleau Miami Beach is not collateral" on the Vegas debt, Scott Baena, a bankruptcy lawyer with Miami's Bilzin and Sumberg firm who represents the Fontainebleau Vegas, told the Miami Herald. "It's not a borrower. It's not cross-collateralized. It is on the other side of the Mississippi."
Miami's Fontainebleau may indeed not be collateral - for now - but it's going to take a good chunk of change to get the construction going again in Vegas, somewhere in the neighborhood of $800 million.
Jeffrey Soffer, the head of the $7 billion real estate firm that owns the Fontainebleau name, is doing everything he can to come up with the funds to complete the troubled project.
Fontainebleau Las Vegas is facing a lot of the same issues faced in Miami: a down-turned economy coupled with an uneven supply/demand rate for luxury hotel rooms, not to mention exorbitant operational costs.
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It's a tough time to start a luxury hotel-casino, even without construction cost problems, but at least the Miami project has been completed. About 30 percent of the construction remains unfinished on the Vegas venture.
Soffer's maintaining his stance that this is simply a hiccup and that the Miami joint is in no danger.
"This move should not in any way affect Turnberry's other assets," Soffer said in a statement. "I'm confident that Fontainebleau Las Vegas ultimately will be another addition to our family's legacy of successful projects."
