A new casino-oriented entertainment complex was due to open on the Strip in Nevada’s most famous city soon. Dubbed The Drew Las Vegas, the project was actually to finalize the construction of the $3.1 billion Fontainebleau Resort & Casino , under a new name. Work on the property began in 2007. However, it was never completed due to the international economic crisis that followed the subprime mortgage crisis.
Everyone thought The Drew Las Vegas would bring a huge boost to the city’s economy, starting with the many jobs it would create during its construction.
Unfortunately, it was learned earlier this month that the Witkoff Group , the project’s developer, had defaulted on a $2 billion loan. It also failed to pay several contractors, who are now facing financial difficulties. Some of them have even filed lawsuits seeking to recover $36 million in total losses.
The Drew Las Vegas: Many unpaid bills
AECOM Hunt and Penta Building Group has emerged as the main contractor for The Drew Las Vegas hotel and casino. It has just filed a lawsuit in Clark County against the Witkoff Group, which is due another $18 million. Also worth mentioning is the architectural firm Bergman Walls & Associates, also involved in the development of the complex, which has just filed a claim for a lien on the complex for $12.5 million. And that’s not all. Other companies associated with the project, including small firms without significant financial resources, are also complaining that they haven’t been paid for their work.
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Financing complicated by Covid-19
Yet things seemed to be moving forward. Earlier this year, the CEO of the project’s developer (Steve Witkoff) told Nevada state regulators that there would be no shortage of money. Yet, in early June, construction on The Drew Las Vegas hotel and casino unexpectedly came to a halt.
The Witkoff Group has not yet made any official announcement regarding the situation. However, the fate of the complex appears to be already decided by most observers. They believe the project was launched without securing full financing and that due to the international Covid-19 coronavirus pandemic, the developer has been unable to secure the necessary funds to complete the project.
A thwarted story
It seems that fate is against this establishment. Indeed, its construction was launched with great fanfare in 2007 under the name Fontainebleau Resort & Casino. At the time, the economy was still thriving. Unfortunately, the following year, the subprime mortgage crisis led to a global economic recession, which prevented the completion of the work.
In this story, businessman Carl Icahn came out the best. He bought the complex for just $150 million in 2010 and managed to sell it to the Witkoff Group in 2017 for $600 million.
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