"First thing I'll tell you is we have not lost our sense," he said. "It's a very complicated bankruptcy and we have spent a very considerable amount of time examining the situation. We have boots on the ground that for months now have been very carefully evaluating costs and the status of the building--what it will take to secure it, what it will take to finish it."

Analyst Bill Lerner of Union Gaming Group has estimated it would take approximately $2 billion to buy out the existing project debt at a steep discount and finish construction. The existing project debt is approximately $1.5 billion and the estimated cost to complete the project is also $1.5 billion, according to multiple reports. Carlino didn't dispute that figure when it was brought up again by an analyst on the conference call. Penn National has made an offer--reportedly less than $300 million--to the debtors and several key creditor constituencies to provide a 'debtor in possession' loan and serve as the stalking horse in an auction of the project.

"Despite the impressive scale of that building, our view is its value is little to nothing because the cost to complete [the project] is at the edge of its value in our judgment," Carlino said. "And around that we have a very, very, very disciplined sense of what we will accept and what we will not, and so it kind of goes our way or it doesn't. It's as simple as that. We chase nothing, we'll stretch for nothing and this process will play out or it won't."

About 30 floors of the tower have been fully completed and require air conditioning, Carlino said, while the top of the building is largely exposed, which is to say lacking a roof. The development is currently being protected and powered with court-ordered DIP financing from its creditors that is on the verge of going away. "If you aren't willing to pay for that [air conditioning] you have to drain all the pipes and now the asset begins to rapidly deteriorate," he says, "so there are some very specific needs there."

Despite the complexity of the situation Carlino believes a decision will be made soon whether Penn National's bid will become the stalking horse bid for an auction. "It's probably going to come to some resolve fairly quickly because the [bankruptcy] judge himself has said this problem isn't going to get any better with age," Carlino said on the conference call, adding that Penn National is currently in discussions with a partner that would "bring something beyond money to the table."

That's not to downplay the importance of the partner being able to bring lots of cash to the table. Carlino and his staff said that only about $500 million to $600 million of financing would be available to complete the project, which means any buyer group would need approximately $1 billion of cash to complete the project. As a result, if it were to gain control of the project, it would keep it separate from the parent company.

"We think we can bring a lot to the Fontainebleau project with a properly executed development--an enormous amount, that nobody else in the US could bring, period," Carlino said, adding that to want to acquire the asset one has to have a positive view about the future of Las Vegas.

"It is indeed the entertainment capital of the world and the current economic crisis will not last forever," he concluded. "In the short run--a couple of years or several years--there could still be a great deal of pain, but Vegas will in time be fine. The trick of course is staying alive until it gets there."

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