Berkley wants talks with Obama administration on Fontainebleau

Monday, April 27, 2009 | 12:29 p.m.

Shelley Berkley

Download the letter from Rep. Shelley Berkley

Fontainebleau files $3 billion suit over funding (4-23-09)

Congresswoman Shelley Berkley today weighed in on the dispute between the $2.9 billion Fontainebleau resort and its banks, asking the Obama administration to get involved and "urging all parties to enter into discussions as soon as possible to rectify the situation."

Berkley, who joined Sen. Harry Reid in expressing concern over the possible lack of $790 million in bank funding for the resort under construction on the Las Vegas Strip, said in a letter to Treasury Secretary Timothy Geithner that the dispute illustrates a bigger problem.

"This is just the latest in a series of very high profile projects that have been put in jeopardy by troubles in the commercial lending market," she said.

"I would ask you to examine this case closely given the impact on Southern Nevada and its 1.5 million residents," she said.

Fontainebleau last week sued several banks, including banks that have received federal bailout money, charging they have wrongly declared a default on the Las Vegas project. The banks haven't yet responded to the allegation and no one officially has specified what triggered the alleged default.

Discussion: 7 comments so far…

By neiman1

4/27/09 at 1:22 p.m.

Suggest removal

I want Las Vegas to succeed but is the government pressuring banks to make loans they don't want to make the answer.

I think we went through this with houses and Barney Frank.

If the property defaults, it gets sold. The new owners finish things with less debt. That's how bankruptcy works. It's not up to harry Reid to pick winners and losers.
By short_fat_hairy

4/27/09 at 3:43 p.m.

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Shelley, you idiot. Yucca Mountain would be more important for Southern Nevada than the Fountainbleu.
By milfy2001

4/28/09 at 4:45 a.m.

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unbelievable !
this is how the housing mess started by politicians forcing banks to make loans to the shiftless and irresponsible.
By American_Gaming_Guru

4/28/09 at 1:18 p.m.

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I think the case here is that the banks committed the cash needed to build the property then when the Fontainebleau folks went to draw on it to pay the bills, the banks refused to pay.

Not Fontainebleau's fault. They want to get their new resort open and were counting on their bank commitments to do so.

Fontainebleau will employ thousands of people...definitely a big priority (as is City Center) for Nevada!
By tellthetruth

4/29/09 at 10:53 a.m.

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so you force the banks to lend the money on this project, then another casino will want the same thing. with the las vegas economy the way it is, probably as soon as the casino opens, it will go bankrupt. look at all the major casino soon to default on their interest loans.
By Gregory

4/29/09 at 12:38 p.m.

Suggest removal

I would gather Federal Government is more concerned about the status on the ground of funding for education and healthcare in Nevada, than an irrational gaming construction project, excuse me, MORE JOBS, that should have never been funded in the first place without due diligence by all parties in a mature Vegas gaming development market.

Bank of America is going to look out for Bank of America, meaning it's entire lending portfolio beyond the scope of one project that at best, will "open to close", or elect to structure and shed debt (i.e. "not pay") to other parties performing in good faith through bankruptcy procedings in the future.

Note to Nevada: You get support for MORE JOBS, and MORE PEOPLE, when you start providing Nevada citizens already here with a fair playing field for things like (a) social justice, (b) sustainability in MORE JOBS and MORE PEOPLE, and (c) stronger public leadership.

Creating MORE JOBS, without addressing all VILLAGE FUNDAMENTALS that make the village viable, such as educating children, safe streets and access to quality healthcare at a rational cost, is not a desired outcome. strange as it may seem.

I am sure City Center's owners would be more than happy for Fountainbleau to not open. As for Turnberry residents, how is your view, now?
By torts

5/7/09 at 10:44 a.m.

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Ironic that the Congresswoman is a close friend of the Soffer family, the developers of the hotel. How much help has she sought for other failing Las Vegas hotel projects? How much money did the Soffer family contribute to her coffers?

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