The Drew Las Vegas
The Drew Las Vegas is a hotel and casino under construction on the Las Vegas Strip in Winchester, Nevada. It is located on the site previously occupied by the El Rancho Hotel and Casino and the Algiers Hotel. Excluding the nearby Stratosphere observation tower, the Drew's 63-floor, 735-foot hotel building is the tallest building in Las Vegas and in the state.
The project was announced as Fontainebleau Las Vegas in May 2005, with initial plans to begin construction by March 2006, and to have the resort opened by 2008. It was intended to be a sister property to the Fontainebleau Miami Beach hotel. Construction began in February 2007, but was stopped in 2009, when the project went into bankruptcy. The project, upon completion, was expected to include: a casino, a spa, 3,300-seat performing arts theater, 2,871 hotel rooms, 1,018 condominium units, of retail space, of indoor and outdoor conference space, nightclubs, and 24 restaurants and lounges. The building was designed by Carlos Zapata Studio with Bergman Walls Associates as the architect of record.
In August 2017, the unfinished resort was sold to investment firms Witkoff Group and New Valley LLC for $600 million. In February 2018, Witkoff and Marriott International announced a partnership to open the resort as The Drew Las Vegas in late 2020. The opening was later delayed, and the resort is now expected to be opened by November 2022. Upon completion, the project will include three hotels with 3,780 rooms. Witkoff Group founder Steve Witkoff named The Drew after his deceased 22-year-old son, Andrew Witkoff, who died of an OxyContin overdose in 2011.
History
Early history
The property was initially occupied by the Thunderbird hotel and casino, opened in 1948. It was later renamed as the Silverbird, and then as the El Rancho, before closing in 1992. In May 2000, Turnberry Associates purchased the property for $45 million and imploded the El Rancho later that year, to make room for a London-themed resort. The London project was ultimately cancelled because of an economic downturn caused by the September 11 attacks.A privately held company known as Fontainebleau Resorts was later co-founded by Jeff Soffer, who was the chairman and majority owner of Turnberry Associates. In March 2005, Turnberry Associates paid $97 million to purchase of adjacent property – south of the former El Rancho – that had previously been occupied by the Algiers Hotel. The Algiers was to be replaced by the Krystle Sands, a high-rise condominium project that was cancelled earlier that month. The purchase gave Fontainebleau Resorts and Turnberry a total of.
Fontainebleau Resorts and Turnberry announced the Fontainebleau Las Vegas on May 12, 2005, as a casino and 4,000-room hotel. The project would be a sister property to the Fontainebleau Miami Beach hotel, purchased by Fontainebleau Resorts earlier that year. The Fontainebleau would be built on the former property of the El Rancho and Algiers, located immediately west of the Turnberry Place high-rise condominium complex. Groundbreaking was expected to occur by March 2006, with the project planned to be opened by 2008. At the time, the company was considering the addition of condominiums to the project, but was still working on the final design plans. Glenn Schaeffer, the former president of Mandalay Resort Group, was hired to oversee the new project as the president and chief executive officer of Fontainebleau Resorts.
In August 2006, the project was approved for a 735-foot hotel tower with 2,929 hotel rooms and 959 condominiums. Also approved was a casino, meeting space, restaurants, and show rooms. In September 2006, zoning for the $1.5 billion project was delayed because of concerns from Turnberry Place residents regarding potential traffic increases that would be caused by the new resort.
Construction
Turnberry West Construction began construction of the Fontainebleau Las Vegas in February 2007. In April 2007, Publishing and Broadcasting Limited purchased 19.6 percent of Fontainebleau Resorts for $250 million. Preparation work on the property was underway that month, although an official groundbreaking ceremony was not held. At that time, the project was expected to cost $2.8 billion, and was to include a 63-story tower with 3,889 hotel and condo hotel units, as well as a casino. In June 2007, Fontainebleau Resorts secured approximately $4 billion from various financial institutions to pay off debts and to finish its projects, including the Fontainebleau Las Vegas, which was expected to open in fall 2009. At the time, Schaeffer predicted that less than one-third of the resort's revenues would come from its casino.The resort's parking garage was to stand seven stories, with the first two floors to be located underground. In July 2007, plans were approved to increase the garage from seven stories to 23 stories. In August 2007, a construction worker died after a 30-foot fall on the property. Several days later, a large concrete slab in the parking garage fell and caused slabs on two lower floors to collapse. No workers were injured or killed by the three large slabs.
In October 2007, residents of Turnberry Place alleged that they were deceived by Turnberry, saying they were never notified of the increased size of the Fontainebleau's parking garage. Other residents were concerned about the impact of noise and pollutants from the new project. Soffer said Turnberry did a "respectful job" of building the Fontainebleau hotel tower away from Turnberry Place residents. Soffer also stated that the property was zoned for a hotel and casino, and said that residents knew such a project would ultimately be built on the property: "We're not going to buy a 20-acre property and leave it as a vacant lot. It's a property with proper zoning and nothing was ever promised. It's as simple as that. The bottom line is you can't please everyone." Turnberry Place residents planned to have a district judge rule on whether the Clark County Commission should have approved the garage re-design, which was alleged to be in violation of a county ordinance. The judge ruled in favor of the project, stating that the re-design was legally approved.
In April 2008, Fontainebleau Resorts stated that the project was fully financed and that progress was continuing despite other local projects that had suffered financial problems, including Crown Las Vegas and the Cosmopolitan of Las Vegas. At the time, the project had $2.4 billion in debt. The company planned to put the Fontainebleau's 1,018 condominium units on sale in September 2008. Between $700 million and $900 million in presales was expected to come from the sales. Condominiums were to range between to ; 17 units would be built on each floor, in the center of the tower. A total of 6,000 people were expected to be employed at Fontainebleau upon its opening. The casino was to feature 1,700 slot machines and 125 table games. The tower was topped out in November 2008.
Bankruptcy
Schaeffer left Fontainebleau Resorts without comment in May 2009. Schaeffer was primarily responsible for securing more than US$3 billion in loans for the project.Bank of America, in its capacity as agent for a syndicate of term lenders, refused to disburse additional funds for construction around this time. As a result, the resort's operator, Fontainebleau Las Vegas LLC, filed for Chapter 11 bankruptcy protection in June 2009. Litigation against Bank of America ensued, alleging that it had wrongfully withheld funds, but the case was resolved in favor of Bank of America in 2012.
In a move seen as an attempt to force creditors to supply funding, Fontainebleau's owner sued himself in the form of the general contractor suing the hotel ownership company – both controlled by the same individual, Turnberry Associates CEO Jeffrey Soffer. Construction work has stopped on the project, which was about 70 percent complete; the grand opening had been scheduled for October 2009. Restaurants were among the uncompleted portions of the resort, although many hotel rooms had been finished. In July 2009, the resort sought permission in bankruptcy court to cancel events that were scheduled for the first half of 2010, as well as permission to cancel a lease for office space which was to be used for Fontainebleau's employee recruitment center.
In October 2009, Penn National Gaming was considering purchasing the partially completed resort and the of land for US$300 million. At that rate the land was being sold for US$12.25 million per acre. Two years earlier land was going for over US$30 million per acre on the Strip. Over US$2 billion had already been invested in the topped-out building on the site.
Carl Icahn ownership
In a Miami bankruptcy court in November 2009, corporate raider and financier Carl Icahn – who previously controlled American Casino & Entertainment Properties – offered US$156 million in cash and financing, outbidding Penn National Gaming for control of the Fontainebleau. Icahn's bid includes a US$51 million debtor-in-possession loan, which, until the resort is auctioned, will provide funding to stabilize the building, cover employees' salaries, cover previous costs and eliminate the need for the resort to ask the bankruptcy court each week to borrow and spend money. Penn National dropped out of the bidding after going as high as US$145 million; they had offered US$101.5 million in cash and loans.As of November 2009, the cost to complete the resort is an estimated US$1 to 1.5 billion.
On February 18, 2010, Carl Icahn assumed part-ownership of the project without an auction by being the only qualified bidder, paying US$150 million.
In October 2010, Icahn auctioned off the furnishings previously intended for the building. For example, the Plaza Hotel & Casino in Downtown Las Vegas bought rugs, furniture and mattresses from the sale and used them in a refurbishment that was completed in late 2011.
In November 2015, Icahn listed the hotel for sale at an asking price of $650 million. The hotel was listed through the CBRE Group. According to CBRE Group, "It will cost about $1.2 billion to finish Fontainebleau. Combined with a purchase price of $650 million, it would take less than $2 billion for a buyer to enter or expand on the Strip market. That's about $500,000 per room, just half of the $1 million or more per room to build new." In April 2017, plans were announced to cover exposed construction areas of the resort's lower floors with cosmetic wrapping, at a cost of $2 million. The exposed construction areas, located along the Las Vegas Strip, were considered an eyesore, and the unfinished resort had become a reminder of the Great Recession. The wrap project began in July 2017.
The Drew
In August 2017, investment firms Witkoff Group and New Valley LLC purchased the resort for $600 million, with plans to rename it. Additional plans were not disclosed for the project at that time. The purchase and planned improvements were financed through Deutsche Bank, Goldman Sachs and JPMorgan. In subsequent months, the Las Vegas-based Grand Canyon Development Partners became involved with the project, which also had new hotel operators. The company planned to water-proof the building immediately and eventually complete it, with a substantial interior and exterior redesign. The Fontainebleau was referred to as Project Blue in county records at the time. Penta Building Group was hired to finish the resort, with construction expected to resume in 2018. Plans to finish the project's design and to obtain a construction loan were expedited in December 2017, after the passage of the Tax Cuts and Jobs Act of 2017. The project will create 5,000 construction jobs, and 6,000 jobs upon opening.On February 12, 2018, Witkoff and Marriott International announced a partnership to open the renamed project as The Drew Las Vegas in late 2020. In addition to The Drew hotel, the resort will also house hotels from two Marriott brands - EDITION and JW Marriott Hotels, making it the first JW Marriott hotel to open on the Las Vegas Strip. Marriott will manage the three hotels. The resort will feature 3,780 hotel rooms and more than of convention and meeting space. The project's new name received puzzled reactions because of its unclear meaning. A representative for Steve Witkoff's company stated that The Drew "feels familiar and approachable, but also fresh and modern – it reflects what people are craving in Las Vegas and signals the experiences Witkoff and Marriott will deliver." The new name is also a tribute to Witkoff's deceased 22-year-old son, Andrew Witkoff, who died of an OxyContin overdose in 2011. Before his purchase, Steve Witkoff said he had heard "nasty rumors" about the building being in poor condition. He said that such rumors turned out to be false and that the building was in exceptional condition. Witkoff has plans for a bridge to connect The Drew to the expanded Las Vegas Convention Center, which is scheduled to complete its expansion in 2020.
In April 2019, Witkoff announced that the opening would be delayed until the second quarter of 2022. The delay was attributed to the amount of time spent working on the project's design. The project's total cost would be $3.1 billion, including the $600 million purchase price, approximately $1.2 billion in construction, and hundreds of millions of dollars for pre-opening costs. The building interior was cavernous and included unfinished escalators, walls, and ceilings, as well as exposed beams and columns. The interior also contained a partially built theater. Witkoff stated the delay would give him better certainty regarding the construction budget. He also announced that a substantial amount of the eventual resort's profits would go to a family foundation that fights drug addiction, in honor of his son. The resort was designed by the architecture firm Diller Scofidio + Renfro. Bobby Baldwin was announced as the chief executive officer of The Drew Las Vegas in November 2019.
Witkoff expected to finalize a construction loan of approximately $2 billion during early 2020. At the time, Witkoff said the interior of the building was active with hundreds of workers, and that a much larger construction presence would be noticeable later in the year with potentially 2,000 workers. The resort is expected to be opened by November 2022.