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twitterFontainebleau moves to cancel conventions, worker contracts
Published Friday, July 17, 2009 | 10:08 a.m.
Updated Friday, July 17, 2009 | 6:26 p.m.
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With construction on its $2.9 billion resort halted, Fontainebleau Las Vegas is canceling numerous meetings and conventions scheduled there for the first half of 2010.
The cancellations were revealed in a Miami bankruptcy court filing Thursday in which Fontainebleau sought permission to cancel the meeting contracts.
The company also sought permission from the court to cancel employment contracts with several employees who left the company after last month's bankruptcy filing; and Fontainebleau moved to get out of a second lease for office space.
The meeting cancellations were for events running from Jan. 1 through June 29. Some, like contracts with the Consumer Electronics Association and the International Council of Shopping Centers, were with groups that typically use multiple Las Vegas properties for their annual conventions and associated meetings.
With its proximity to the Las Vegas Convention Center, Fontainebleau had been expected to pick up substantial business associated with conventions there. Fontainebleau extends from Las Vegas Boulevard to Paradise Road on Riviera Boulevard and is just northwest of the convention center.
The Las Vegas Convention and Visitors Authority and big hotel and convention center operators in Las Vegas have previously said they would work to accommodate any meetings and hotel room reservations set for Fontainebleau that needed to be canceled.
A Fontainebleau spokesman said there are events booked after June 2010, but the company is not disclosing them for competitive reasons.
"We fully expect Fontainebleau Las Vegas to be completed so that it can accommodate meetings and conventions. The timing of that opening will depend in large part on the timing of renewed financing," Fontainebleau said in a statement.
The employment contracts Fontainebleau wishes to cancel were with these 11 employees who left the company in June: Charles N. Esposito, Colleen R. Birch, Michael P. Gonzalez, John R. Devlin, Michael W. Sacco, Patricia Gilbert, John E. Cottrill, Kathryn M. Hernandez, Richard C. White, Kathryn R. Turner and Darleen S. Ghirardi. Their titles, salaries and other terms of the contracts were not disclosed.
"In the business judgment of the debtors, the employment contracts do not provide a benefit to the debtors or their estates, and the employment contracts may therefore be rejected," Fontainebleau said in its court filing.
The office space contract was signed in 2008 with a sister company to Fontainebleau, Turnberry/Centra Sub LLC, owner of the Town Square retail and office development at Las Vegas Boulevard and Interstate 215. Fontainebleau and the Turnberry companies are controlled by Miami developer Jeffrey Soffer.
With the casino resort stalled, Fontainebleau says it no longer needs the office space, which would have cost it $53,023 per month for the first year. The monthly payments then would have increased annually by about $2,300 per month through the end of the lease in April 2014, Fontainebleau said.
The rental space would have been used as an employee recruitment center for the casino resort, Fontainebleau said.
Fontainebleau earlier asked the court for permission to cancel a lease for office space it was using on Convention Center Drive, near the resort construction site.
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Is the building at least fully enclosed to the outside weather? We don't get much bad weather, but I'm just wondering if it can at least be left to hibernate until somebody picks up the pieces, invests a billion or so on the cheap, and starts it back up in say the year 2020. Getting more and more like Star Trek years....
i thought vegas was "recession proof".
i notice i never hear any of the p.r. types saying that anymore.
i love vegas, but i think it's going supernova.
The tower is closed in and partially furnished. I think they may have a plan in place to close up the convention and casino areas. It seems like any type of resolution may be out of reach for awhile.
This is scary stuff, I dont see how city center can avoid the same problems.
city center has got bigger wallets behind it, but when (if) it opens it will do very well in the beginning, but once the "we gotta check it out" phase is over, it will be hard to fill all those rooms.
someone will buy it up and make plenty. despite the local wisdom the world will not be ending any time soon.
yes, newtovegas...
some magic fairy will sprinkle pixie dust and all the manufacturing jobs will suddenly come back.
a year ago 10% unemployment in vegas seemed impossible. now it's pushing 15%.
we will have 20% unemployment here. don't kid yourself.
Thanks, unionstrong. I'm wondering if the building is completely covered with sprinklers, so if a money miracle occurs, the job could start up right away. I went through a similar situation in New Jersey, and it took forever to get the project restarted, primarily due to the fire departments objections to re-occupying the building. The Trump Taj Mahal. It sat dead for 8 years. Never thought the same thing could happen here 20 years later.
The tower is fully sprinklered and the fire pumps have been signed off with CCFD but the casino sprinklers have not been installed yet.
unionstrong,
Beg to differ on the statement "fully enclosed." There are several openings from where the manlifts are/used to be and from the tower cranes.
As for fully sprinklered. Not by a long shot. You should get with the sprinkler company that was doing the work. Most of the upper floors are not protected as well as the lowrise areas. The CCFD would not do any inspections under the pool deck due to a confined space issue.
Iknow you are correct their are several openings in the building. I was making a general statement about sprinklers in the tower. The pool deck does not extend under the tower it's part of the lowrise. I was wondering if CCFD was going to have an issue with the space under the pool deck, what do you know?
mrjb you wrote:
"This is scary stuff, I dont see how city center can avoid the same problems."
mrjb, are you guessing or something? City Center is financed to completion. They also have taken deposits on a significant % of their condos. Some buyers are asking for lower prices but the developer will no doubt come to terms and settle for less.
Sorry, I just think City Center's situation is analagous to Fountainebleau's, other perhaps than that the economy will not be fully recovered when it opens. The recession affected the fianancing of both projects but MGM Mirage was able to come up with a solution. MGM Mirage is probably the foremost gaming operator in the world whereas Foutainebleau is a fledgling operator that got stuck with a capital structure crisis that is harder to solve.
Also, I predict Fountainebleau will start back up. The Soffers are pretty big. They will get the rest of the financing once the legal issues are settled. Just watch.
The real question is, do City Center, Fountainebleau, and others of their ilk draw new steady customers to Las Vegas or do they steal them from other hotels. All of these places are like the Trump. A large chunk of those purchasing condos are doing it for the expressed purpose of having them rented as hotel rooms when the owners are not in residence. So if the new joints survive but do not generate extra traffic, who goes under? According to news reports a lot of the financing for many of these projects was to be from the sale of the condos. If the buyers are given big discounts or they back out altogether, that's more financing they need to raise. With the problems MGM has already had trying to get this project completed, to say everything is now peachy is just wishful thinking.
This article is fairly misleading in the characterizations re: the employees who "left" the company in June. In most cases, these employees were actually laid off by the company, in spite of having contractual agreements to provide severance. These were employees who were drawn away from other jobs and asked to sign a contract to guarantee their services. Hopefully an enterprising lawyer is taking up their cause in this process...
"yes, newtovegas...
some magic fairy will sprinkle pixie dust and all the manufacturing jobs will suddenly come back.
a year ago 10% unemployment in vegas seemed impossible. now it's pushing 15%.
we will have 20% unemployment here. don't kid yourself".
I'm with newtovegas. I love it here!!! I'll say this again and again and again. If you're unhappy living here, just move elsewhere or don't visit. There will be another to take your place.
Buh-bye!!
Only legal prostitution and legal pot will save Vegas. Gilesspee and his goody-two shoes will destroy the area, the "family Vegas Vacation" was a flop. Next thing you know - he will want more taxes for more of his his demolition derby patrol cars.
how do you say fountainbleu in Chinese or Arabic? We should brush up on our language skills as these will be our new masters.