Tag Archives: construction

Bad (Really Bad) Karma Surrounds Las Vegas Fountainbleau Project

If a building could have feelings and emotions, the Fountainbleau project in Las Vegas would be severely depressed.  Fountainbleau Las Vegas lenders recently sued hundreds of contractors as lien disputes escalate over unpaid bills at the now bankrupt 3,815-room casino resort project. 

There are 342 contractors and other mechanics lien holders, claiming to be owed a whopping $467 million for work at the stalled Las Vegas Strip development, that have been pressing for the right to take over the project for what they are owed. 

Lenders, in response, charge that the liens filed by Fountainbleau subcontractors are inferior. 

Meanwhile, iconic financier Carl Icahn is reportedly moving forward with his plans to buy the project during an auction this month, offering $156.2 million.

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Las Vegas Mothballs $4.8 Billon Echelon Resort

With a growing list of partially finished resort projects dotting the Las Vegas skyline, the shelving of the $4.8 Billion Echelon project joined the ranks of the Strip boneyard late last week. Echelon

The Boyd Gaming project, on the site of the formed Stardust, which was imploded in August 2008, plans to remain dormant for three to five years.  It’s across the street from the bankrupt and shuttered Fountainbleau, who is still courting suitors, Echelon is located on 87 acres of what was prime real estate.  Only an unusuable parkeing garage, unfinished power plant and bare steel-and-concrete remain. 

In the meantime, Boyd will spend an estimated $15 million a year to secure and maintain the property that was once destined to be five hotel tower site with 5,000 rooms.

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Fountainbleau Hotel-Casino on Life Support in Las Vegas

At least one unidentified potential buyer is negotiating to take over the bankrupt Fontainebleau hotel-casino development in Las Vegas. 

But significant hurdles still remain for the resort to be sold and its construction completed, including difficulties a buyer may have in obtaining financing.

Stung by substantial losses on Las Vegas casino and real estate deals, banks and investors have been wary about investing in Las Vegas during the recession — especially with a growing over-supply of hotel rooms on and around the Las Vegas Strip. 

Fontainebleau also indicated it’s less likely it will succeed with efforts to force Bank of America and other big banks to continue financing the $2.9 billion resort on Las Vegas Boulevard. 

Fontainebleau, however, cautioned the sale of the project would be a complex transaction complicated by its inability to include the resort’s separately-financed retail component in the bankruptcy and “the difficulty that any purchaser will face in the current credit environment obtaining financing to complete the project.” 

Besides these factors, any sale would be subjected to scrutiny by bank and investment company lenders, bondholders and contractors — groups each owed hundreds of millions of dollars. 

While the potential buyer for Fontainebleau has not been identified, the companies most mentioned as being interested in the deal are Penn National Gaming, which has been looking for an opportunity to expand to Las Vegas; and deep-pocketed Apollo Management L.P. — one of the companies that controls Harrah’s Entertainment Inc.

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Holy Cow! Huge Las Vegas Casino, Sign Planned

In another bit of welcome good economic news, the Las Vegas City Council approved plans for a new casino and sign at the corner of Las Vegas Boulevard and Sahara Avenue by the end of this year. 

Not just any usual Las Vegas sign, mind you, but a 98-foot, 11,200-square-foot electronic sign at a high-profile intersection where the city of Las Vegas meets the Strip. 

On the site of the former home of the Holy Cow! brewery, which closed in 2002, plans now call for a 37,100-square- foot bulding with a 9,000-square-foot casino, a 6,000-square-foot restaurant and 4,000 square feet of retail space, including a Walgreens. 

Bucking the construction tide (not suprisingly, with Las Vegas facing an excess of room inventory), no hotel rooms are planned for the property. 

In 2004, the Las Vegas City Council approved plans for a 73-story building with 960 condominius on the site, but the lands was placed back on the market in 2005; new owners bought the property in 2007.

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Las Vegas Shangri-La Morphs into Ghost Town

Out in the desolate, dusty Nevada desert on a lonely road 17 miles from the Las Vegas Strip, sprung by dreams aplenty and lots of elbow grease, a haute, larger than life and get-away-from-it-all Italian-style community was born.  Lake Las Vegas symbolized the best life had to offer in Las Vegas.  Shangri-la homes clustered around a man-made dazzling two-mile-long azure lake, encircled by palm trees and three championship golf courses (two designed by Jack Nicklaus), featuring complimentary spas and two world-class hotels – Loews Lake Las Vegas Resort and Ritz-Carlton.  LakeLasVegas

A stylish replica of Florence’s Ponte Vecchio Bridge, a popular venue for weddings, crosses the water on the south end, near a tasteful, small casino. 

Even singing diva Celine Dion saw fit to build with her husband, Rene Angelil, their home on the lake’s south shore. 

Now, those symbols of opulent affluence and good times largely ring hollow, the dreams from which they were spawned largely dashed, remaining sour tributes and testimonials to our deep and continuing recessionary woes. 

The idea of exclusive desert resort living originally was the brainchild of J. Carlton Adair, an actor and businessman. Adair acquired the land in 1966 in a swap with the federal government that also included the rights for 10,000-acre feet of water. Creating what he planned to call Lake Adair would require damming water destined for Lake Mead, the Colorado River reservoir that provides water to Southern Nevada. 

But Adair went bankrupt before his dream was realized and a subsequent group of investors also failed to raise the necessary money. 

Developer Transcontinental Corporation took up the cause in 1990, a year before the dam was completed. The city of Henderson, a bedroom community next to Las Vegas, was attracted by the promise of a new solid tax base. It agreed to sell the community the water it would need to replenish the evaporation under the scorching sun. The community pays a water bill of about $2 million a year. 

Last year, Transcontinental lost the property in foreclosure after defaulting on $540 million in loans. The new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. One if its anchor hotels, a Ritz-Carlton owned by Village Hotel Investors LLC, also filed bankruptcy to stave off foreclosure and has been sold to new owners. One of three premier golf courses has been abandoned. 

The current owner of much of the land and amenities is now Atalon Group.  “Like many large-scale second home and resort communities throughout the country, Lake Las Vegas has had to adjust to the decreased demand for property and pricing of investments,” Frederick Chin, president of Atalon subsidiary LLV Holdco LLC, said in a statement. 

“Atalon’s goal for Lake Las Vegas is to reset and reposition the community to flourish as market conditions improve, thereby achieving what is in the best interests of homeowners and stakeholders alike.” 

After the development filed for bankruptcy in July, corporate officials won approval to pay for urgent repairs to prevent the premature deterioration of two pipes underneath the lake. They argued the damaged pipes threatened to drain the lake like water from a bathtub. 

Some residents are fighting like mad, trying to stave off what many think will be the inevitable demise of their homes and the community, while working to hold Atalon to its commitment. One group is trying to arrange to buy the private South Shore Golf Club now tied up in the bankruptcy. 

But other residents and businesses are ready to move to less remote pastures. 

New-home construction has slowed to a crawl, though the community is far from built out. Foreclosures have spread like a virus, and home values are falling. 

Resident and real estate agent Lynne Hoffman has had her Lake Las Vegas home on the market for three years with an eye toward moving to a community closer to more ordinary comforts — supermarkets, clothing stores, and a bank.

 She’s dropped her price to $488,000 – $40,000 less than she paid in 2001. She gets offers from potential buyers, she says, but they lowball her lowball price. 

Plenty of properties have fallen much further from the height of Southern Nevada’s real estate bubble, one of the most inflated in the nation.

Real estate listings show a 4,000-square-foot mansion that sold in 2005 for $2.7 million was marked down to $1.2 million in May. A 1,700-square-foot condominium that sold for $1.2 million in 2004 is now listed for $389,000. 

Celine Dion’s home was purchased for $1.2 million in 2002, as the Canadian songstress began what became a five-year run at Caesars Palace on the Strip. Since then, Dion has moved on to other gigs and the home has only sunk in value to about $795,000, according to estimates on Zillow.com. 

Residents are jumping ship. In May, nearly 10 percent of the homes on the market at Lake Las Vegas were either bank-owned or short sales.  Nearly 80 percent of the homes listed were vacant. 

And although home values have dropped to affordable levels for potential middle-class buyers, homeowners’ association fees that go to pay for upkeep of common areas have not. Some residents pay three such fees, adding more than $500 to a monthly housing bill. 

Lake Las Vegas, a community designed as both a resort and residential destination, is heavily dependent on second-home buyers and tourism. Both faltered when the economy sputtered, leaving now a big question mark on the future viability of the once stylish, trendy community.

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Las Vegas Mob’s ‘Cement Shoes’ Now Concrete Canoes?

The mob has been doing much less ‘planting’ nowadays.  And with the many stalled and failed casino construction projects dotting the Las Vegas landscape brought on by an ever constricting economy, it’s no secret that Las Vegas has a ton – maybe two? – of ready and willing concrete at its disposal. 

Grabbing this weighty waste opportunity, UNLV engineering students have built and are planning to race a buoyant unlvcanoeconcrete canoe in the fiercely competitive 2009 National ASCE Concrete Canoe Competition in Tuscaloosa, Alabama on June 11-13.

But first they must clear the regional competition hurdle, finishing in the top five in competitions set from April 1 through 4 in Hawaii. About 20 teams are competing. 

To win it will take equal parts of technical skill, creativity and determination. 

Created from a year’s worth of blood, sweat, and tears, the slippery smooth, svelte 250-pound black, blue, and white canoe with a UNLV mosaic on the bottom, and the name Kiss Our Glass on the side, was engineered to be a precise 20 feet long and 30 inches wide. It has to be made that precise.  That’s the rules. 

The races, endurance, sprint, and slalom combined, count for 25 percent of the overall score. The remaining 75 percent is based equally on a submitted technical design paper that highlights the planning, development, testing and construction of the team’s canoe; a formal oral presentation, in which the team has to detail their canoe’s design, construction, racing ability and other innovative features, as well as defend their choices to the judges during a question and answer session; and the end product-the final racing canoe and project display, which is scored on aesthetics and visual presentation. 

Tiffany Hearn, 22, the senior engineering student and captain of the UNLV canoe-building team, haunchos the seven-member team of other UNLV engineering students that are trying to field a winning canoe. 

Engineering students at UNLV and all over the country do this every year. They enter local and regional competitions. A national champion is declared.  Last year the University of Nevada, Reno won.  

UNLV has never made it past the regional competition.  Last year they came in 11th place, their best finish yet. Maybe a win is in their cards this year. Maybe it isn’t.  That’s not the point. 

“This is a big project that takes months to complete. They have to be able to work as a team,” said Bill Culbreth, an associate dean in UNLV’s college of engineering. “Most engineering projects will work that way.” 

So it is that the national concrete canoe competition is more than a boat-building contest. It’s a metaphor for the real world — where there is not nor will there ever be a market for boats made of sand, glue and water. 

Noe Santos, 21, the team member most responsible for figuring out how to make this particular blend of concrete, doesn’t even plan on working in that area after he graduates in May. He’ll be doing research on solar cells. 

In the meantime, he and the rest of the UNLV team have spent at least 40 hours every week since May working on this canoe. “No Christmas vacation. No Valentine’s. No anything,” Hearn said. 

Santos further explained that you can’t use just any old concrete – and, no, they didn’t use our scrap casino concrete – to make a canoe that actually works. The competition’s rules say the canoe must float back to the surface after being submerged. UNLV has never done well on that test. 

The secret to the team’s confidence this year is the concrete concoction, which weighs in at 54 pounds per cubic foot, about 8 pounds lighter than water. 

The concrete, lined with a carbon fiber reinforcing mesh and with tiny metal cables, is then blended with tiny glass bubbles and hollow glass beads about the size of ice cream sprinkles so the concrete has little air pockets inside. 

In the past, UNLV’s teams have blended the concrete with rocks. They’ve had hits and misses, a couple of times suffering competition-ending catastrophic failures; the boats broke in half. 

But not this year, the team members say. 

The team took their boat out to a man-made lake at Desert Shores on March 14. They rowed in it. They sank it.  But the good news it that it came right back up. 

To work on their speed, team members have been practicing twice a week in a traditional fiberglass canoe. They’re getting pretty fast. 

Las Vegas Backstage Access hopes the UNLV team is just fast enough- taking home their first win!

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Las Vegas’ CityCenter Project Facing Collapse?

The very survival hangs in the balance for Las Vegas’ largest employer and the city’s largest construction project- and arguably one of the world’s largest and most expensive buildings.   MGM Mirage, operating nine Las Vegas Strip resorts and employing more than 61,000 workers, is now embroiled in a contentious lawsuit over the $9.1 billion, 76-acre CityCenter development with its half-shared partner, Dubai World through its Infinity World financial subsidiary.  dubaiworld

Analysts said the lawsuit filed Sunday casts a damaging dark cloud over the project and sends more negative signals on the overall financial health of MGM Mirage.   According to the lawsuit, Dubai World, a 50-50 joint venture partner in the CityCenter project, is seeking unspecified damages and wants to be relieved of its obligation under the companies’ agreement, which was struck in August 2007. 

Dubai World, a world-leading business conglomerate suffering from a two-thirds drop in their oil prices – leading some to question if the lawsuit is merely trying to sever their joint venture agreement or simply gain more project control – said MGM Mirage, which is CityCenter’s managing partner, is responsible for mismanagement and cost overruns with the project.  Dubai World further contends that statements by the MGM Mirage in the company’s financial filings last week with the Securities and Exchange Commission constitute a breach of the joint-venture pact and has put the project at risk. 

The lawsuit took the MGM Mirage reportedly by surprise, but theirspokespeople responded vehemently yesterday that they are doing everything they can do and are ready, willing, and more than able to meet all financial obligations and debt holder payments. 

Despite the lawsuit, CityCenter still plans to open in stages, starting in October with Vdara, a nongaming condominium and hotel tower, and Aria, CityCenter’s centerpiece 4,004-room hotel-casino, scheduled to open on December 16.  

MGM Mirage continues to accept job applications, having over 90,000 job applications for the CityCenter project and planning to hire 10,000 employees to boost the staganant Las Vegas economy. 

However, MGM Mirage and Dubai World are still seeking the remaining $1.2 billion in financing to finish the project. 

MGM Mirage received from its lenders last week a two-month waiver to avoid violating its loan covenants.   Some financial analysts believe that MGM Mirage might have to file a Chapter 11 bankruptcy to restructure their $13.5 billion in debt.

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