Question of the Day - 21 June 2023

It’s easy to name the first one, as Bellagio was the initial resort to break the $1 billion barrier in 1998. The final tab was $1.6 billion.

Contemporaneous Paris came in at a comparatively parsimonious $760 million, mainly by dint of sharing the existing physical plant of Bally’s (now Horseshoe).

Bellagio was one of a wave of pre-millennium megaresorts, the next one being Mandalay Bay, which totted up a mere $950 million, just coming in under the billion-dollar wire. It only looks like it cost more.

A couple of years later, the new Aladdin (now Planet Hollywood) opened after a $1 billion remake. The final tally is in contention and we've seen estimates between $1.1 billion and $1.7 billion, but suffice it to say, it definitely cost more than a billion to build. 

Also part of the intense scrum of late-'90s casino construction was Venetian, Sheldon Adelson’s monument to La Serenissima, which cost $1.5 billion. It was a bargain compared to Palazzo, Venetian’s 2007 sequel, which cost $2.4 billion.

Between the post-9/11 (2001) tourism slump and the need to absorb all this new product into the Strip’s bloodstream, there wasn’t any new megaresort product for a few years. But when Steve Wynn demolished the Desert Inn to make room for Wynn Las Vegas in 2002, the final cost proved to be a then-record $2.7 billion. The initial resort was so successful that it, too, was cloned in near-record time. Encore broke ground in 2006 and was completed in 2008 at a tab of $2.3 billion. (Again, some economies of scale were involved.)

That was a bit more than half the cost of the $4 billion Aria, itself representing almost half the cost of the entire CityCenter project, opening in the maw of the Great Recession to initially disappointing results.

Resorts World Las Vegas, belatedly completed and opened in 2021, carried a final price tag of $4.3 billion, yet another record.

That will undoubtedly pale next to Fontainebleau; it's still in progress, as mentioned in the question, scheduled to open sometime this December, so it remains is something of a moving target in terms of cost. Bloomberg reports the final cost as $3.7 billion but … it was estimated at $3.5 billion at the time it was shut down, in 2009. The price of completion was estimated variously from $1.5 billion to $2.2 billion, not counting the $650 million it cost to pry Fontainebleau from Carl Icahn’s clutches, but probably including the dinero needed to replace what Icahn removed and resold, including all the furniture as well as a custom-made escalator.

If, as is an article of faith in Las Vegas, Fontainebleau was “70 percent complete” back in ’09 and $2.2 billion was needed to provide the remaining 30%, that implies a total cost in the staggering range of $7 billion. Since developer Soffer Properties is privately held, we may never obtain a definitive accounting of the cost, especially for a project that has gone through multiple ownerships and revolving-door management teams. If it comes in for $3.7 billion at the end of this year, we think it will be the bargain of the Vegas century.