Second Chances on the North Strip

Will the Fontainebleau finally fulfill its promise?

Last week, investors from the Witkoff Group and New Valley LLC purchased the Fontainebleau site from Carl Icahn for $600 million. It launches a new chapter for a piece of land that has long been an ego check for the Las Vegas Strip.

Ancient history: the Thunderbird opened at 2755 Las Vegas Blvd. South in 1948. It was most notable for being the resort that Meyer Lansky was proven to have a secret ownership share of thanks to a 1954 Las Vegas Sun investigation. With Lansky (allegedly) removed from the picture, the Thunderbird continued as a middle-of-the-road Strip hotel until 1972, when Caesars World bought the property.

Caesars planned to redevelop the site as the Marc Antony, a mass-market, convention-geared brother to its flagship, Caesars Palace. But the early ’70s oil shock dried up financing, and the company sold the Thunderbird without having built its mega-resort. It was renamed the Silverbird and then the El Rancho (an homage to the Strip’s original El Rancho Vegas) before closing in 1992.

A succession of owners made plans for the property that say a lot about the possibilities of the early ’90s: the futuristic Starship Orion and the down-home Countryland USA. The El Rancho’s marquee, reading “Future Home of Countryland USA,” was at first a signal that this old property would soon have new life and then, as Countryland USA failed to materialize, a constant reminder that not all promises come to fruition.

In 1997, Countryland USA was the outlier: the Sands, Dunes and Hacienda were all being replaced by fantastic resorts that tourists had a hard time imagining, i.e., The Venetian, Bellagio and Mandalay Bay. You would be forgiven for thinking that every Las Vegas developer had the Midas touch—if you didn’t ponder Countryland USA. The sign and property came down in 2000, a tidy marker for the end of the ’90s boom.

The Fontainebleau’s construction began in 2007 and stopped amid the recession in 2009. As with the Marc Antony and Countryland USA projects, lack of financing was the culprit. But the scale of its failure reveals much about how Las Vegas’ ambitions and potential for disaster have grown.

The Marc Antony’s fizzle was a disappointment to Caesars World executives and shareholders, but it left no visible impact—business as usual continued at the Thunderbird. Countryland USA’s failure to launch was more obvious, with the derelict property an eyesore on the North Strip, but its 13-story tower remained intact. From afar, you could easily forget about the closed El Rancho.

The Fontainebleau, however, has been unavoidable visual litter in the Las Vegas skyline for the past eight years and is the most representative of the three recession busts (with the Stardust/Echelon and Frontier/Plaza). And for all the good news of the last few years—including record visitation and major league sports coming to town—the Fontainebleau has been a nagging reminder of Las Vegas’ fallibility, a 735-foot memorial to misplaced hopes.

I would say that failed development became the new normal for post-recession Las Vegas, but it wasn’t new: No one under the age of 25 was alive when there was last a functioning resort there. The successful redevelopment of the Fontainebleau site would upend two generations of redevelopment misses.

So should the new owners finish the project, open it with great fanfare and spearhead a revival of the North Strip, they would create a new normal of their own. That would have an obvious economic impact but a subtler (though no less potent) psychological one: That hunk of blue glass would no longer be a daily reminder of failure, but instead a symbol of the indomitable Vegas spirit, that willingness to rush in where angels fear to tread.

Las Vegas has been called the city of second chances, and a reborn Fontainebleau would be a mammoth monument to the power of a second chance.

As we in Sin City should know, it’s all in how the dice fall. The Marc Antony, Countryland USA and Fontainebleau all seemed like sure things—until they weren’t. Deep pockets and executive talent don’t guarantee success, and it is very difficult to predict how a resort whose design has not been revealed will fare in a market whose dynamics can’t be known in advance. But should the ghosts of failures past be exorcised, the building will be a symbol of a new Las Vegas. Just as the implosion of the El Rancho closed the ’90s boom, this would close the book on the Great Recession.

The next downturn, however, will produce its own monument to failure. We shouldn’t necessarily dread that: A town of second chances shouldn’t lose sight, physically or emotionally, of shattered dreams. 7

David G. Schwartz is the director of UNLV’s Center  for Gaming Research.