Drew Las Vegas owner Steve Witkoff expects to close on a roughly $2 billion construction loan in the next month or so and usher in a burst of building activity afterward.
Witkoff, who bought the partially built tower in 2017, told the Las Vegas Review-Journal on Thursday that he expects to obtain the construction loan for the north Strip hotel-casino project, formerly the Fontainebleau, around late February or early March.
The unfinished high-rise is one of Las Vegas’ tallest buildings and still looks quiet to passersby. However, Witkoff said the interior is a “beehive of activity” with hundreds of workers, and he figures people will “see a much larger” construction presence at the property starting in June, with perhaps 2,000 workers there.
Opening November 2022
He expects to finish the 67-story resort by November 2022.
Witkoff, founder of his namesake development firm, spoke with the Review-Journal outside the Nevada Gaming Commission’s hearing room in Las Vegas, after the regulatory panel cleared the way for him to get a casino license by issuing a preliminary finding of suitability.
His project, named for his son, Andrew, who died of an OxyContin overdose in 2011 at age 22, is opening a new chapter for Las Vegas’ towering monument to the recession.
The blue-tinted resort has stood unfinished since the original developer pushed it into bankruptcy more than a decade ago, serving as a constant reminder of Southern Nevada’s wild real estate boom and devastating crash.
Witkoff told the Gaming Commission that since the financial crisis, he hadn’t seen a property in a major market that could be rehabilitated but hadn’t been except for this one. He chalked that up in part to the project’s complexity – it was about 70 percent finished when it went bankrupt – and to “all kinds of rumors” swirling around the tower.
He told the Review-Journal last year he heard “150 nasty rumors” about the Fontainebleau before he bought it, including that it was falling down and that plumbers poured concrete in the pipes. In truth, he said at the time, the building was in “exceptional shape.”
He also said it would have cost far more to develop the project from scratch than to finish the partially built structure and that Las Vegas has “one of the healthiest” hotel markets in the country, with little new supply since the recession.
At the time, he said the Drew’s total price was $3.1 billion.
“We think it’s the best deal we’ve seen in the last six years,” Witkoff told the Gaming Commission on Thursday.
The Fontainebleau’s original developers broke ground in 2007 and expected to finish in 2009. But the real estate bubble burst, sinking the economy, and the project went bankrupt in 2009 after a group of lenders allegedly backed out of their funding commitments.
Billionaire Carl Icahn bought the mothballed project in 2010 for around $150 million. After leaving it largely untouched, he sold the Fontainebleau for $600 million to Witkoff and Miami real estate firm New Valley, a subsidiary of cigarette maker the Vector Group.