However, declining gaming revenues and weak demand for condominium-hotels in Las Vegas increases the risk the property won't be able to meet its debt service obligation when it opens.

The project has not begun selling its 1,018 condo-hotel units, proceeds from which are applied to debt reduction during construction.

"Any shortfall in condo-sale proceeds relative to original expectations will have a direct negative impact on (Fontainebleau's) leverage," Foley wrote.

Fontainebleau Resorts executives said in April, before the mortgage crisis hit the condo-hotel market, the project expected to raise $700 million to $900 million from condo presales.

Additionally, the collapse of financial house Lehman Bros. Holdings has left a funding shortfall on the retail component of the project, which could imperil the entire project.

Failure to fund the retail loan, which is financed separately through the parent company, Miami-based Fontainebleau Resorts, could ultimately result in a default under Fontainebleau Las Vegas' credit facility, according to Moody's.

The project is designed with 3,889 condo and regular hotel rooms, 100,000-square-foot casino, performing arts theater, shops, restaurants and 353,000 square feet of convention space.

Company executives, who are in Miami for the opening of a $500 million expansion there, did not return a call for comment.

Miami-based developer Jeffery Soffer and former Mandalay Resort Group President Glenn Schaeffer co-founded Fontainebleau Resorts in 2005.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.