New York businessman Steven Witkoff has high hopes for The Drew Las Vegas.
Witkoff told the state Gaming Control Board Wednesday he thinks Las Vegas is the healthiest hotel market in the country today so after establishing a “manchising” arrangement — part management, part franchising — with Marriott International, he set out to finance improvements and the $600 million purchase price through Deutsche Bank, Goldman Sachs and JP Morgan.
Meeting in Carson City, the board unanimously recommended approval of licensing for Witkoff for the Drew, which is expected to open in October or November of 2022.
The Nevada Gaming Commission is expected to consider final approval on Jan. 23.
After more than an hour of testimony before the board, Witkoff explained how he acquired the property, formerly known as Fontainebleau, from Carl Icahn, how renovations will be financed and how he came to rename the property.
“This is essentially a high-end renovation job,” Witkoff said. “It’s in preconstruction today. We’ve essentially X-rayed the entire building.”
Witkoff said the 67-floor, 3,780-room building is in excellent condition and he’s enthused about its proximity to the Las Vegas Convention Center expansion on the north Strip. He plans direct access to Convention Center land with a bridge from the property over Elvis Presley Boulevard.
Witkoff said he spent around $10 million to do a thorough review of the building before turning construction management over to Grand Canyon Development Partners.
He told the Review-Journal last year that the total cost of the building and renovations would be around $3.1 billion.
But Witkoff’s strong confidence in the Las Vegas market makes the investment worthwhile, he said.
The north Strip is being re-energized with the Convention Center project, construction underway on Resorts World Las Vegas across Las Vegas Boulevard, new ownership for Circus Circus by Phil Ruffin, and major changes at the recently renamed Sahara. Ruffin and Wynn Resorts own additional vacant land in the area and the Las Vegas Convention and Visitors Authority still owns available acreage where the Riviera once stood.
Witkoff has hired longtime gaming industry executive Bobby Baldwin as CEO of The Drew and he said his son, Alex, will seek a license as a manager.
Witkoff said union labor would be used for construction and that he’s been in preliminary talks with the Culinary Union to make The Drew a union shop.
In an earlier unrelated action, the board unanimously recommended approval of licensing of MGM Resorts International’s digital sports-betting system.
The company and several subsidiaries, including Isle of Man-based GVC Holdings, a 50-50 partnership in the venture, have been recommended for licensing as an information service and for manufacturing and distributing.
MGM’s intermediary company, Roar Digital LLC, is led by CEO Adam Greenblatt and a board that includes managers Lee Feldman, Kenneth Alexander, William Hornbuckle and Scott Butera.
GVC has previously been licensed in the state.
The board also recommended approval of the licensing of Icahn as a controlling beneficial owner of Caesars Entertainment Corp. As part of the request, the board also approved the recommendation of licensing for directors Keith Cozza and Courtney Mather, who are expected to remain on the Caesars board when Eldorado Resorts Inc. acquires Caesars in a $17.3 billion deal expected to close later this year.
In testimony before the board, Cozza said there are no immediate plans for Icahn to make a new investment play in the gaming industry in Nevada. Cozza also said he was involved in the sale of Fontainebleau to Witkoff. He said the company doesn’t normally involve itself in short-term investments
Two Blackbirds Holdings
Hotel developer Steven Witkoff has shared that the name of his Strip hotel — The Drew Las Vegas — is a tribute to his son, Andrew, who died of an OxyContin overdose when he was 22 in 2011.
On Wednesday, he explained the source of subsidiary companies within the Witkoff Group involved in the property, Two Blackbirds Holdings LLC and Two Blackbirds Hospitality Management LLC.
Witkoff told the state Gaming Control Board that after his son died, he was encouraged to visit a medium to explore a spiritual connection.
“I never thought I’d be the type of person who would ever go to a medium,” he said. “So I went to her and walked in the door and she said to me, ‘Did you give your son a watch with a black face?’ and there’s not a lot of watches out there with a black face, but I’m a collector. So I started to have tears and I said, ‘Yes,’ and she said, ‘Well, your boy wants you to wear it every day.’ I never wore another watch since then.
“Then she said to me, ‘Your father and your son are going to come to you as two black birds periodically. And that’s how you’re going to know that they’re there for you.’ And this is a true story, I went back down to Miami where I have a home and I’m on the golf cart with my girlfriend and she’s eating potato chips. Two black birds landed on that cart and they grabbed two potato chips. And that was it for me. That’s how the name Two Blackbirds came to me.”