The Fontainebleau was planned to be a hotel, casino, and convention complex on the Las Vegas Strip’s northern end. Work on what would have been a $2.9-billion resort began in 2007. However, Las Vegas (just as the rest of the United States and of the world) was hit and mired in a recession of dramatic proportions, which forced developers to nix the ambitious project.
First turning into the poster child of the mind-boggling crash and burn of Las Vegas and its casino industry, the unfinished casino resort then found itself at the center of an investment tactic that many despise, while others wish they had the wits about themselves to explore.
In 2010, New York investor Carl Icahn, whom many have referred to as one of the finest vulture capitalists, bought the Fontainebleau out of bankruptcy for the total amount of $150 million to sell it at a huge profit several years later.
Last summer, the unfinished hotel and casino resort was purchased by real estate investment firms Witkoff and New Valley LLC for $600 million. Spotting sings of revitalization in Las Vegas and the potential of the otherwise underdeveloped North Las Vegas Strip, the two companies decided to complete and launch the property.
New Chapter for Fontainebleau
Steve Witkoff, CEO of the New York-based real estate firm, explained earlier today that the Fontainebleau was “so well-conceived” nearly a decade ago that they now have a lot of possibilities to place their imprint on the property from a design point of view.
The Drew Las Vegas will feature 3,900 hotel rooms, 500,000 square feet of meeting and convention facilities, a casino as well as a number of food and beverage, entertainment, and retail facilities. Mr. Witkoff pointed out that they are yet to finish the building’s design, and that, among other things, they plan to “reimagine” the existing 8.5-acre pool deck. The real estate investor further noted that opening a property that is different from anything else on the Strip would be at the heart of their development strategy.
Partnering with Witkoff, Marriott will debut its luxury lifestyle hotel brand EDITION in Las Vegas. It is also important to note that the hospitality giant will manage all three hotels at The Drew.
Marriott International Executive Vice President and Chief Development Officer Tony Capuano said that his company was particularly attracted to the 500,000-square-foot convention and meeting space at The Drew. According to Mr. Capuano, Las Vegas is a great market for luring “leisure transients and group business”, and with convention facilities and nearly 4,000 hotel rooms The Drew will be well-positioned to compete with some of the Strip’s iconic properties.
Here it is also important to note that the hotel and casino resort is being developed in an area of the Strip that had not seen much construction activity before, but has attracted major investors over the past several years. Resorts World Las Vegas, another long-delayed project, is set to open doors on the Strip’s northern end in 2020. The resort will target Chinese and Chinese-American patrons with its eclectic Asia-inspired design and diverse gaming opportunities for spendy high roller patrons.
The planned opening of the two resorts – The Drew and Resorts World Las Vegas – will bring a total of 7,000 new hotel rooms to a part of the Strip located in immediate proximity to the Las Vegas Convention Center. The convention, meeting, and event facility itself is in the middle of a 1.4-million-square-foot expansion process that is scheduled to be completed in 2020.
Mr. Witkoff revealed that a bridge will connect The Drew to the Convention Center. According to the real estate investor, the time for the currently underdeveloped northern portion of the Strip may finally be coming.
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