Fontainebleau Las Vegas moves one regulatory step closer to Dec. 13 opening

November 1, 2023 7:49 PM
Photo: Fontainebleau Las Vegas (courtesy)
  • Buck Wargo, CDC Gaming Reports
November 1, 2023 7:49 PM

The Fontainebleau Las Vegas is on pace to open December 13 after receiving a positive recommendation Wednesday from the Nevada Gaming Control Board. The Nevada Gaming Commission still has to sign off on the opening at its Nov. 16 meeting to make it official, but no problems are expected after licensing issues were addressed at the Control Board meeting.

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The Fontainebleau faced some pushback at the meeting when a representative of the Teamsters Union urged Nevada regulators to pass on the property’s licensing over a lack of discussions with the union. The union threatened pickets on the property’s opening day.

The Board, however, recommended licensing for Jeffrey Soffer, CEO and chairman of Fontainebleau Development, and partner Brett Mufson. The Fontainebleau Las Vegas is a joint development by Koch Real Estate Investments, the real estate investment arm of Koch Industries.

Soffer was the original developer of the Las Vegas project that broke ground in 2007 before the Great Recession and real estate crash forced the project into bankruptcy in 2009. It was acquired in 2010 by billionaire Carl Ichan, who sold it in 2017 to New York developer Steve Witkoff. Soffer reacquired the property in February 2021.

Fontainebleau Development has invested $3.8 billion in the 67-story 3,644-room resort, which can produce $154 million in taxes in its first year of operation, according to the company.

“It’s a great honor for me to be here,” Soffer told the Board. “This project has been around a long time and to have it finished — when you see what we’ve done there, you’ll be very proud and impressed what it means to Nevada, Clark County, and Las Vegas.”

“We’re happy to see this 20-plus-year project coming to fruition and happy to see it will be rejuvenating that portion of the Las Vegas Strip that has been dormant for so long,” said Board Chairman Kirk Hendrick.

“Anybody who has been to the Fontainebleau Miami knows it’s nothing but a top-shelf product and I look forward to this project finally coming to fruition,” said Board member George Assad.

Fontainebleau Las Vegas President Mark Tricano said it’s exciting being 45 days from the opening, pending regulatory approvals.

“As I look at the organization that we’re creating, I look to some of those characteristics and values that have been represented in this project over the past 20 years — resilience, commitment, vision, and excellence,” Tricano said. “In the next 45 days, what we will bring to this market is a property that the industry, southern Nevada, and our members and ownership are very proud of.”

The plan calls for 7,100 jobs. Thus far, 1,850 have been filled, with more than 80% of future employees committed. All 7,100 positions will be filled by the end of 2024.

“Leading by culture and values and providing the employee base a vision and inspiration for our future project and growth, we’ve found a tremendous amount of interest in working for us,” Tricano said. “We’ve been very pleased with the results over the past three months of hiring.”

In the public-comment section of the meeting, Beverly Williams, a business representative for Teamsters 986 that represents thousands of workers at dozens of Las Vegas properties on the Strip, told the Board that, before they elevate the application, that they should consider how the project could bring a labor dispute to the north end of the Strip.

“The Teamsters Union has asked Fontainebleau Development to enter into an agreement that respects workers’ rights and allows labor peace on the Las Vegas Strip, which has already entered into this agreement with the Culinary Union Local 226,” Williams said. “Teamsters expect the same agreement. There were initial communications with Fontainebleau Development about this, but they’ve been completely unresponsive for months, despite repeated attempts to continue discussions on our part. Without such an agreement, there will be a labor dispute at the Fontainebleau, including picket lines on opening day and continuing afterward. Given our decade-long relationship with the Culinary Union, we expect they will honor our picket line. This dispute will not be limited to the Fontainebleau.”

Williams talked about Fontainebleau plans to connect to the Las Vegas Convention Center West Hall, which could impact the facility, since its workers are represented by the Teamsters Union. She even cited former NFL quarterback Tom Brady opening a shop at the Fontainebleau.

The Board didn’t address Williams’s comments during the agenda item.

The lone issue with Soffer that has come up was an ongoing federal tax investigation regarding a loan involving the Town Square shopping center in Las Vegas. There was no update on that.

“Your reputation and experience are all very exemplary,” Hendrick told Soffer.

Mufson addressed a failure to update his application until August and disclose a civil subpoena that he received in November 2022, saying he now understands his responsibility to do so. He said he didn’t want to offer excuses, but instead provided some context around his action. He was told by his SEC attorney it was a routine document request and should be kept it confidential. Mufson told Hendrick that it’s the first time he has ever gone through a gaming application.

The gaming regulations are about letting “good people inside the gates” and once inside, Nevada doesn’t have a term on licenses, Hendrick said.

“We expect our licensees who are found suitable to be in our gaming industry to come to us affirmatively,” Hendrick said. “Once that happened and you had that conversation with our gaming agents, they gave me a level of comfort that you divulged everything and mistakes happen. It’s what happens after those mistakes. I was concerned when I heard about this, but after I was informed what your actions were, it gives me a much higher level of comfort.”

“Lesson learned,” Mufson said about future disclosures.