The multi-billion-dollar Fontainebleau Las Vegas passed its first regulatory test on Wednesday as it sets the stage for state licensing in November ahead of the north Strip casino-resort opening in December.
The Nevada Gaming Control Board issued a preliminary finding of suitability for Jeffrey Soffer and Brett Mufson of Fontainebleau Development, a hospitality and real estate group founded by Chairman and CEO Soffer and led in partnership with Mufson. Bowtie Hospitality, a subsidiary of Fontainebleau Development, was also part of the hearing. The matter now will go before the Nevada Gaming Commission on July 27.
The Fontainebleau Las Vegas is a joint development between Fontainebleau Development and Koch Real Estate Investments, the real estate investment arm of Koch Industries.
The lone issue that arose during the hearing with Soffer’s gaming attorney, Frank Schreck with Brownstein Hyatt Farber and Schreck, was his updating the Board about a federal tax investigation. Schreck said “nothing material” has occurred since his last update. The Fontainebleau is continuing to cooperate in the investigation and provided documents to the government.
“The focus of the investigation appears to be an analysis of a loan related to a development of Town Square (a mixed-use retail project in Las Vegas) more than 10 years ago,” Schreck said. “It was purchased from the lender by Jeff Soffer and his sister Jackie. According to Mr. Soffer’s counsel, Rod Rosenstein, the former Acting Attorney General (of the United States), the issue seems to be whether or not there was any debt forgiveness related to the repurchase of that loan. We are still unsure whether Mr. Soffer’s tax accountants properly accounted for any forgiveness in the complicated transaction.”
Due to the Great Recession in the late 2000s, Schreck said Soffer had hundreds of millions in net operating losses, which were available to satisfy any tax liability. Mr. Soffer’s attorneys believe the investigation should be concluded in the next three to four months and they feel very confident in the outcome.”
Soffer, who has a gaming license in Florida, said he bought the Fontainebleau Miami in 2005 and soon after created Fontainebleau Resorts. He was the original developer of the Las Vegas project that broke ground in 2007 before the recession and real estate crash caused the project to go into bankruptcy in 2009. It was acquired by billionaire Carl Ichan in 2010 and Ichan sold it in 2017 to New York developer Steve Witkoff, who planned to call it Drew Las Vegas. Soffer reacquired the property in February 2021.
“It’s been a full circle with this development and I’m excited to be able to finish this,” Soffer said. It’s going to be fabulous for Las Vegas. It’s definitely a little different than originally planned. It’s much more upscale.”
The 67-story resort will have 3,644 hotel rooms and 421 suites.
Mufson told the Board the Fontainebleau is investing $3.9 billion into the Las Vegas economy, of which about $215 million is in historically disadvantaged businesses. He said the resort has the potential to produce $154 million a year in taxes.
Between 3,600 to 3,800 construction workers are on the site. When open, the resort will have about 4,600 full-time employees and about 1,950 part-time employees, then reach 7,100 when including partnerships, plus roughly 250 executives. The resort will pay employees weekly rather than the traditional bi-weekly.
The resort will boast 550,000 square feet of meeting and convention space adjacent to the Las Vegas Convention Center West Hall. Of the 57 meeting and breakout rooms and four ballrooms, one will be the second largest in the market at 106,000 square feet.
More than 150,000 square feet of gaming space will house 1,300 slot machines, 128 table games, 18,000-plus square feet of high-limit space, 3,200 square feet of domestic high-limit space, and six private gaming salons. The sportsbook is 13,480 square feet and there’s poolside gaming on the pool deck, Mufson said.
The resort has three main floors, starting with the casino on the ground floor, retail promenade and fitness on the second floor, and six-acre pool deck above that featuring seven pool experiences. There are also a 56,000-square-foot salon and spa and 14,000-square-foot fitness center.
“Part of our culture and infrastructure is to lean into health and wellness facilities, and that’s why our fitness center and spa are abnormally large,” Mufson said.
There are 36 “unique first-to-market restaurant concepts” and Mufson said it’s a 50-50 split between fine dining and casual. “We’re proud of our food and beverage program. We developed a program that will have a global presence that includes chefs and partners from around the world.”
In addition, there’s a dayclub and nightclub and the theater holds 3,800.
“It’s an arena-size theater stage and it will be a multi-purpose room,” Mufson said. “We will have residences and host groups and meetings, speaker series, and car events.”
Gaming Control Board Chair Kirk Hendrick praised the project that he acknowledged has a long history and didn’t have any questions about its earlier failures under Soffer due to the economic downturn. Doing a hearing on a finding of suitability is a good first step to learn of any problems before the process is near the end, he added.
“I’m very excited for that part of the Strip to see some revitalization and your property move forward,” Hendrick said.
In June, the Fontainebleau named Mark Tricano as president of the resort.
