Fontainebleau’s original developer sets out to finish what he started
After a warm introduction from Gov. Steve Sisolak, developer Jeffrey Soffer walked on stage at a media event this week for Las Vegas’ long-stalled blue tower: the Fontainebleau.
Soffer, the project’s original developer, reacquired the property early this year, more than a decade after it went bankrupt and started collecting dust and changing hands. This week, he unveiled a plan to finally finish what he started.
“It’s kind of a crazy story, but I’m back,” he told the audience Tuesday.
Soffer, owner of Florida-based Fontainebleau Development, aims to open the 67-story Fontainebleau Las Vegas in the fourth quarter of 2023. The hotel-casino is 75 percent complete, and construction has already resumed, according to a news release, which did not say how much it would cost to finish the 3,700-plus-room project.
This marks the latest penciled opening date — under the latest set of owners — for a north Strip high-rise that remains an unfinished reminder of Las Vegas’ mid-2000s real estate craze, its devastating crash and, more recently, the coronavirus pandemic’s severe economic fallout.
Soffer, who reacquired the Fontainebleau in partnership with the real estate wing of Kansas conglomerate Koch Industries, told Review-Journal reporter Colton Lochhead on Tuesday that it’s a “wonderful building” and that the deal “felt right.”
“It was the right timing and … everything came together with the partners … We just bought it,” Soffer said, adding, “It was a great deal.”
According to property records, the new owners acquired debt on the project Feb. 11 and, the same day, gained ownership of the property through a process that lets people avoid foreclosure.
Soffer indicated that the Fontainebleau, after sitting unfinished “for all these years,” was “exactly the way that I left it.” He also said he didn’t consider buying an existing resort in Las Vegas.
“I built this property, what’s here today,” he said.
Plans for the Fontainebleau were unveiled in 2005, and the project, led by Soffer and former Las Vegas casino executive Glenn Schaeffer, broke ground in 2007.
But the roaring real estate market soon crashed, the economy spiraled downward, and the Fontainebleau’s developers sued several banks in spring 2009, alleging the “unscrupulous” lenders backed out of their commitment to finance construction of the multibillion-dollar resort.
Without the additional funds, the project “cannot be finished and will never open,” the developers warned.
Ultimately, the Fontainebleau went bankrupt in mid-2009, and billionaire Carl Icahn acquired it in 2010 for around $150 million.
As the economy improved, Icahn sold the property in 2017 for $600 million to developer Steve Witkoff and real estate firm New Valley, a subsidiary of cigarette maker the Vector Group.
In early 2018, Witkoff and Marriott International unveiled the resort’s new name, Drew Las Vegas; the plans for two Marriott brands there; and an expected opening in late 2020.
Witkoff, who later pushed the opening to 2022, said early last year that he was close to obtaining a roughly $2 billion construction loan for the project. But in March 2020, as Las Vegas rapidly shut down over fears of the coronavirus outbreak, he suspended construction.
Contractors later filed tens of millions of dollars’ worth of liens alleging unpaid bills for their work at the Drew. Several ex-employees also sued Witkoff, alleging they were laid off from the project amid the pandemic and weren’t paid what their contracts called for.
As recently as July, Marriott’s website said the resort would open in October 2023. But last month, the hotel giant confirmed that it “reached an amicable settlement” with the current property owners that resulted in Marriott “exiting the project.”
Soffer’s firm says it will operate the Fontainebleau.
Will the Strip’s big blue tower finally open? After 15-plus-years of waiting, what’s another couple years to find out?
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.
