A replica in Las Vegas of the most exclusive hotel in Miami Beach, the Fontainebleau, made a lot of sense in the early 2000s, but then the financial crisis hit and the idea was abandoned after 75 percent of the building was completed. Subsequent sales to billionaire Carl Icahn and New York developer Steven Witkoff didn’t change the status of the vacant building.
But last week, the real estate arm of Koch Industries, owned by the politically powerful Kock brothers, bought the property from Witkoff and brought back some of the original developers to move it forward.
“We believe strongly in the Las Vegas market and see the property as a great opportunity to contribute to the long-term success and positive trajectory of this vibrant and innovative region,” Jake Francis, president of Koch Real Estate Investments, said in a statement.
Financial terms were not disclosed but Witkoff purchased the property in 2017 from Icahn for $600 million after Icahn bought it out of bankruptcy for $150 million. Witkoff had planned to develop the property as the Drew, named after his late son, and had hired former Mirage and MGM Resorts honcho Bobby Baldwin the complete it.
Jeffrey Soffer had originated the project as a complement to his Fontainebleau in Miami Beach and had brought in the visionary ex-Mandalay Bay executive Glenn Schaeffer to run it. Soffer is back with the Koch team (but not with Schaeffer), although it wasn’t confirmed that the property would carry the Fontainebleau moniker after the Koch buy.
“We’re currently evaluating all of our options and looking forward to being part of the advancement of the world-class Las Vegas entertainment industry,” Brett Mufson, president of Fontainebleau Development, told Bloomberg.com, which first reported the sale.
The Fontainebleau has 3,780 rooms and suites. It’s located on the former site of the El Rancho and across the street from Resorts World Las Vegas, owned by the Genting company of Malaysia, which is slated to open in early 2022, as well as very close to the new expansion of the Las Vegas Convention Center.
