The Fontainebleau hotel in Miami Beach in Florida became famous in the 1960s as a playground for stars such as Frank Sinatra, Elvis Presley and Jerry Lewis.
Istithmar, the investment arm of the government owned Dubai World, has sold its 50% stake in the Miami Beach landmark Fontainebleau hotel back to South Florida developer Turnberry Ltd.
The Miami Herald reports that part of the deal contained an “earnout agreement” whereby the Dubai government backed Istithmar will earn an undisclosed bonus “in the event the state of legalized gaming in Florida, in the future, facilitates gaming” at the Fontainebleau; effectively allowing Istithmar to retrospectively collect what its share would be worth if the Fontainebleau had a casino.
Dubai World paid $375 million in 2008 for a 50 percent stake in Fontainebleau Miami Beach. The resort, which borrowed more than $620 million to fund a restoration programme before it reopened in November 2008, had to restructure the loan in 2010. Dubai World offered $100 million of new equity to lenders as part of a debt restructuring plan.
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Turnberry is owned by South Florida's Soffer family. Jeffrey Soffer bought the 1,504-room Fontainebleau hotel in 2005.
Jeffrey Soffer backed a push in 2008 to allow large resort casinos in Florida, and hoped to open a string of Fontainebleau casinos around the world before plans for resorts in Las Vegas and Dubai itself fell apart during the recession.
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