More than 10 years after developers abruptly halted construction of the planned $3 billion Fontainebleau project, leaving the bankrupt and unfinished Las Vegas Strip resort with an uncertain future, the property’s new owner gave the much-maligned building a glowing overview.
New York developer Steven Witkoff spent close to an hour Wednesday in Carson City predicting a bright outlook for the renamed Drew Las Vegas, which he expects to open in late 2022.
Witkoff, whose investor group paid Carl Icahn $600 million in 2017 for the 67-story, 3,700-room property, told the Gaming Control Board he spent “$10 million in research” to determine the suitability of the 70-percent-complete structure and to disprove many of the urban myths associated with the building, which has sat largely untouched for the last decade.
“There were all types of things we found to be untrue,” said Witkoff, who is seeking a finding of preliminary suitability from state gaming regulators to move forward with completing the Drew.
For example, rumors of angry construction workers pouring cement down the pipes when work was halted didn’t happen, Witkoff said.
“It was the best money, well-spent. All the systems were in great working condition, and kudos to (Carl) Icahn. He spent $10 million a year to maintain it,” Witkoff said. “The main component parts (of the building) are good. This is essentially a high-end renovation project. We’ve x-rayed the entire building.”
The Gaming Control Board recommended Witkoff and his company, Two Blackbirds Holding, be found suitable. The Nevada Gaming Commission will take up the matter later this month.
Witkoff said the financing for the Drew’s completion is place.
“For first time, we’re going to have a real estate construction loan here,” Witkoff said. “The markets look at Vegas as real estate assets, not gaming assets.”
The Strip hasn’t seen a new multi-billion project open since the Cosmopolitan in 2010. Witkoff told the Control Board that Las Vegas was ready for another integrated resort development. Also, 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.
Witkoff also answered questions about the November hiring 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.
— CDC Gaming Reports (@CDCNewswire) January 9, 2020
Witkoff said his attorney, Frank Schreck, introduced him to Baldwin. In addition to Baldwin, Witkoff said his son Alex will move to Las Vegas and work to get licensed as a manager.
He also addressed the name Drew. Witkoff said the property was named for his son, Andrew, who died of a drug overdose in 2011.
“It represents a lot of me and my family,” Witkoff said. “It’s a spiritual thing.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.