Now, the real work begins.
Nevada gaming regulators found New York developer Steven Witkoff suitable as owner of the renamed and unfinished Drew Las Vegas development, a Las Vegas project that has sat largely untouched for more than decade.
Witkoff, who purchased the 70 percent-complete planned resort – formerly known as Fontainebleau – two years ago for $600 million, told the Nevada Gaming Commission Thursday a real estate construction loan of approximately $2 billion to finish the building would close by the end of February or early March. He committed to opening the 3,700-room resort by Christmas 2022.
“We have a construction commitment to open the project by the second week of November 2022,” Witkoff said during a nearly 40-minute question and answer session with the commission.
Gaming Commissioner Debra Fuetsch said she had questions about the financing for the construction, but said those concerns can wait until Witkoff seeks formal licensing to operate the Drew, which is named for his son, Andrew, who died of a drug overdose in 2011.
Witkoff told the commission he has invested more of his own money into the Drew project than any of his previous commercial and residential projects.
The gaming regulators were happy that Witkoff is committed to complete the building, which was left unfinished and became an eyesore and reminder of the recession. The original developers filed for bankruptcy in 2009.
Corporate raider Carl Icahn acquired the building for $150 million out of bankruptcy, but never tore down the structure with the hopes of selling the project.
“This was the best deal we’ve seen in the last six years,” Witkoff told the commission, citing Las Vegas’ business climate and the opportunity “to rehab the resort and create a world class destination. We haven’t seen a property like this coming out of the financial crisis. It was a green light special.”
Witkoff said his team has spent the past 18 months “mapping” the entire 67-story building, including “taking pictures robotically of the property.” He told the Gaming Control Board earlier this month he needed to disprove many of the urban myths surrounding the building.
“We did our due diligence,’” Witkoff said. “The two main points the work completed on the property was all good and the design was forward thinking for us to do what want to complete the building. We know the condition of the entire property.
The Strip hasn’t seen a new multi-billion project open since the Cosmopolitan opened in 2010. Witkoff said Las Vegas was ready for another integrated resort development.
The location, on the north end of the Strip, is the middle of a vibrant expansion period.
The $4.3 billion Resorts World Las Vegas will open in the summer of 2021; the $1.2 billion expansion of the Las Vegas Convention Center is scheduled for January 2021; and billionaire Phil Ruffin acquired Circus Circus from MGM Resorts International last month for $825 million, a deal that included more than 100 acres of real estate, much of which is undeveloped.
The other key to the Drew transaction, Witkoff said, was a deal made with Marriott International, in association with two of the company’s other brands, JW Marriott and Edition.
“They really have no presence in Las Vegas. It’s an under-served marketplace for them,” he said.
The Drew will feature more than 550,000 square feet of convention and meeting space, with multiple retail, spa, nightlife, pool, and restaurant venues.
Gaming Commissioner John Moran Jr. commended Witkoff his hiring last November of veteran gaming executive Bobby Baldwin as the Drew Las Vegas’ CEO. Baldwin, who oversaw development and operations of the massive CityCenter complex on the Strip, retired as that property’s CEO at the end of 2017.
“I think you made a wise choice there,” Moran said.
Witkoff also committed to become “part of the community,” said he plans to build affordable housing for the workforce.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.