Who’s better for F’bleau: Icahn or Penn?

That’s the unspoken question hanging over a lengthy piece in yesterday’s Las Vegas Sun. While Penn National Gaming is willing to commit $1.5 billion or more to finishing Fontainebleau, lead bidder Carl Icahn may be able to do the job for two-thirds the amount. Penn CEO Peter Carlino suggests that Icahn might achieve the savings by dint of avoiding a complete build-out. And, given the Vegas economy (still in dead-cat-bounce mode), what’s wrong with that?

Penn itself is talking about repositioning F’bleau for the mid-market … but for the high-end, too. The latter demographic is, with all due respect, a market segment to which Penn is a novice. Then again, that’s what was said about Circus Circus Corp. when it built Mandalay Bay and again about Boyd Gaming pre-Borgata. So you never know. Penn also maintains it has “a company with some sort of resort expertise” lined up as a joint-venture partner, which is a bit different from what it told J.P. Morgan analysts.

While Icahn (left) keeps his powder dry, Carlino fires off a broadside of his own: “The potential for people to do something foolish is limitless.” He ought to know. After unsuccessful talks with MGM Mirage, which drove a hard bargain for The Mirage, Carlino kicked the tires on Planet Hollywood, letting it fall to Harrah’s Entertainment instead. He even floated the notion of purchasing Green Valley Ranch.

Considering that Greenspun Media Group and other Greenspun family entities are in a world of hurt, if Carlino didn’t make a play for their half-interest in Green Valley Ranch and Aliante Station, why not? Creditors trying to wring blood from the stone that is Station Casinos would surely welcome Penn — and its considerable liquidity — to the table, in hopes of wresting those two assets from Station’s grasp and placing them with a solvent foster parent instead.

Heck, even though he acknowledges that CityCenter‘s debut will set off a feast of cannibalization on the Strip, Carlino set his sights on the biggest, most expensive dog among unfinished/financially troubled Vegas properties. (Aptly, Penn boasts a CFO named Clifford.) Now that he’s got his long-sought casino in Kansas, plus at least one in Ohio (depending on whether Columbus is allowed to opt of a recent constitutional mandate), Carlino’s famous $1.5 billion war chest is going to be spread thinner and thinner.

I have to take issue with a few points in Liz Benston‘s analysis. Regarding Columbia Sussex‘s self-defeating $2.75 billion Aztar Corp. takeover: “Critics say that inflated price tag helped fuel the severe cost-cutting that led to the company’s downfall, especially in Atlantic City, where regulators revoked the company’s casino license for, among other infractions, failing to adequately staff the property.”

No, critics don’t say that. ColSux said it — promising potential underwriters in its “road show” presentations that it would recoup the purchase price through severe staff cutbacks; words that would come back to haunt CEO William J. Yung III when his New Jersey license was up for renewal.

“Icahn doesn’t build casinos, he trades them — profiting when formerly depressed properties are resold with leaner operating costs and once the overall market for casino investments improves.” True, he doesn’t build casinos per se, but he’s not a here-today/gone-tomorrow “flipper,” either. A dozen years ago, he snapped up what looked like one of Vegas’ biggest catastrophes ever, the Stratosphere, repositioned it and ran it for the better part of a decade before cashing out when the market was at its peak (and buyers were at their most foolish).

Icahn also took a bankrupt motel with a never-used casino, the Sunrise, reopened it and eventually expanded it as Arizona Charlie’s Boulder. So Icahn’s got some experience taking lemons and making lemonade. Sounds like just what the doctor ordered for F-bleau.

As for the increasingly blustery Carlino, he might do well to engrave the following words: “This is a classic case of … be careful what you wish for, because you’re going to have this thing and you’ve got to be prepared to write checks to see it through.” Because if he makes another run at F-bleau and gets it, Carlino might be the one regretting that for which he wished.

Anybody can build a $6 billion casino … in Photoshop.

Fort Fontainebleau? That should be the prospective title of an F-bleau-related inquiry about buying Big Bleau as a resort for military personnel and their families. First, try to erase from your mind the bizarre image of a casino floor filled with men and women in desert camo BDUs. Concentrate on the fact that this $350 million (uh-huh) pseudo-bid comes from a company with a revoked Nevada business license and its pet project is a loony $6 billion, six-tower military retirement community cum casino resort. This failsino was supposed to have opened at an undisclosed location four months ago. (Anybody care to guess what the “well-known off-strip [sic] 2,000 room [sic] Hotel/Casino [sic] with land and planning permit to build 4 new towers” might have been?

Before taking any wooden nickels from these folks, the bankruptcy judge might want to ask how they intend to finish F-bleau when they can’t even build a Web site. The company claims to have “a broad range of interests” — so broad as to be indefinable — and makes some extremely questionable financial projections.

If there’s ever been a casino operator who made “a 28% to 43% profit range within a 36 to 48 month period” the rest of the industry would sure like to meet him and pick his brain, wouldn’t it? Asked for particulars about its bid, Craig Road Development wrapped itself in Old Glory, dispensing vaporous self-serving, flag-waving bombast. Remind me: Just whose last refuge is patriotism?

On the other hand, if somebody’s willing to rush in and offer $350 million for something Carl Icahn (who didn’t just fall off the turnip truck) thinks is worth less than half that amount, who’s the bankruptcy judge to say those fools and their money shouldn’t be parted?