As they did for the Fontainebleau’s developers him, the dice may have tumbled the wrong way for Steven Witkoff and his plans for the Drew Las Vegas.
The coronavirus shutdown forced the New York developer to halt work on the resort back in March, according to a report in the magazine Business Korea, which may have been alerted to problems at the Drew by a number of prominent South Korean investors, among them government-backed casino operator Kangwon Land and a subsidiary of Hyundai Motor Group.
The magazine said none are receiving interest or principal payments, meaning the project could be in default.
“Most of the hotel assets in the United States have requested investment period extension,” said one of the investors. “The hotels took a more direct hit from the pandemic due to their profit volatility higher than that of office buildings.”
The website Vital Vegas ran the story last Monday, and it was picked up by industry newsletter CDC Gaming Reports.
The 3,700-room, 67-story Fontainebleau casino hotel, originally priced at more than $3 billion, filed for bankruptcy protection when its financing dried up in the Great Recession. It was left unfinished. Carl Icahn purchased it in 2010 for $150 million and sold it two years ago to Witkoff for $600 million. Witkoff’s desire to finish the resort, which reportedly was 70 percent complete when he bought it, won the enthusiastic backing of Nevada regulators. Gaming industry veteran Bobby Baldwin was brought on as CEO, and plans were laid to get it open by Christmas 2022 as the Drew, named in honor of Witkoff’s son, who had died some years before of a drug overdose.
Witkoff reportedly was close to securing a $2 billion construction loan earlier this year to finish the job when the pandemic hit.
He is not deterred, however, as his New York-based Witkoff Group told CDC Gaming Reports: “We remain committed to the project and are actively working with our partners and lenders. We are confident that we will be successful in completing the Drew Las Vegas.”
