Plug Pulled on The Drew, Project in Default

Back in March 2020, we shared that The Drew project had been suspended indefinitely. Now, the embattled project appears to be in default.

The embattled Drew was formerly the embattled Fontainebleau.

Fontainebleau wrap

Just when we thought we’d expended all our sad.

Fontainebleau sits across from Circus Circus and was abandoned in 2009 due to the financial crisis.

In 2017, the unfinished Fontainebleau was sold to Witkoff Group for $600 million.

We’re now learning more about the investors in The Drew. A group of South Korean companies have sunk about $490 million into the project.

According to “Business Korea,” the investors include Mirae Asset Daewoo, NH Investment & Securities, Hana Financial Investment, Kangwon Land and a Hyundai Motor Group subsidiary.

Apparently, principal and interest payments have been suspended since May 8, 2020.

One of the securities companies claims the project is not in default yet, but a “deferment request has been made in relation to local conditions.”

As recently as January 2020, Drew owner Steve Witkoff believed he would close on a $2 billion construction loan. While we appreciate whimsy, it didn’t look good. Then coronavirus hit the fan.

The Fontainebleau/Drew saga has been a roller coaster ride. If roller coasters went through active volcanoes and minefields.

Everyone’s rooting for The Drew, but bringing the abandoned hotel back is expected to cost billions, and there were questions about the viability of The Drew even before the COVID-19 crisis.

The hope was The Drew would open by November 2022, but reality is likely to prevail over whimsy. Again.

42 thoughts on “Plug Pulled on The Drew, Project in Default

  1. Hi Im Dave

    At some point, somebody with some kind of influence needs to hit the reset button and consider leaving the structure as a monument of “development hubris.” It’s been over a decade. I don’t think there’s anything above a miracle as this point. I hope I’m wrong. As people note, the north end of the Stirip needs some TLC.

    Reply
    1. Jenn In Las Vegas

      Maybe as a sort of “reset button,” Clark County could take over and designate the would-have-been Drew resort property as the official new location for riots in Las Vegas. Among other benefits, this could save the defaulting owners, creditors, and/or bankruptcy administrator the costs of demolition. Could be a win-win, though I haven’t thought thru all the particulars…

      Reply
      1. Chad Rodick

        I’m not saying in Las Vegas. I meant bring the people from other states to Las Vegas to tear it down

        Reply
  2. Andrew

    Seriously,it’s really time to tear that thing down. Sell it as scrap,makes 200M out of it and call it a day.

    Reply
    1. Chad

      I 100% agree. The police should just let the riots hit the building, would be cheaper then hiring a demo company. Heck it wouldn’t cost anything. I think it would be amazing to see the Sahara again from the Wynn.

      Reply
      1. Jenn In Las Vegas

        The future “Drew” owners could $ell some airspace (“viewspace”) to the Wynn in order to help finan$e a new lower-profile casino-resort. Sounds like a winn-winn to me. Create a new old-Desert-Inn-style resort on the land. I know the $$$ isn’t found in lower density (i.e., single-family vs. condo), but it sure would be nice and maybe would pay off in the long run. Oh, and put in lots of evaporative-cooled patio, outdoor dining, and outdoor-bar live-music spaces, please. Just wishing…

        Reply
        1. HornBet

          I think that’s a great idea! Agree about the density problem, but how cool would it be to have replicas of some of the old joints? Desert Inn, El Rancho, Thunderbird, etc.

          Reply
          1. Jenn In Las Vegas

            I like and appreciate your Reply above, Hornbet. We agree! Though I do not recommend that the next “Drew” property be a replica, I do recommend that it could be a “new better” w/ a Desert-Inn-similar-type vibe/appeal.

  3. BST

    Thank you for the info . I have been wondering and wondering about this . In late Jan or early Feb. we had noticed some activity on the site .And I thought maybe that was a positive.
    I would agree with the knock it down post as opposed to sitting another 10 years or so -but how sad the whole situation .

    Reply
  4. Chad

    To be honest the project since it was fountainbleau has never came true. Just look online and see YouTube videos of it. It’s been 15 years since the building sat abandon. It’s a eyesore. The Drew Plot of land is a high value land. I can see the convention center taking over the building to pave it and use it as parking. A while back someone set a fire in the parking garage and come to find out it’s gonna cost more now since the garage suffer damage. The windows on the building are busted out to me it seems squatters/homeless people are living inside.

    I have to agree with Jenn in Las Vegas, let the riots go onto the property and destroy it. Put it on fire, because at this point there no point in letting it sit. The north side needs to come back. Resorts world is opening soon. The convention center expansion is almost done. Steve Witkoff just needs to stop lying saying he bought a former CEO on board and such. To be honest I don’t believe one word he is saying. Didn’t trump wanted to buy the project but instead let Witkoff buy it. If Trump did buy it, the building would had been finished and who knows we would be visiting it today.

    Maybe Hardrock should invest in this eyesore and open it. Put a giant guitar on the top of the building. That would be amazing. Either way, Clark country needs to get there act together and figure out what todo with the building since it’s been 15 years of no construction, 15 years with no many hopeful openings that hasn’t happened.

    Reply
    1. Mike Alexakis

      Trump bankrupted casinos, and his “business model” is to rent his name out as a brand, the Gaming Control Board in Nevada would never give a casino license to someone who lies serially, especially about their net worth… If the land is truly “high value”, its value would be as a resort/casino, so they will likely try to get some deep pockets to take over…

      Reply
    2. Jenn In Las Vegas

      Though I never knew the El Rancho (which the would-be Drew ultimately replaced, according to https://en.wikipedia.org/wiki/The_Drew_Las_Vegas), I do remember (fondly and vaguely) the New Frontier and The Stardust across the street (roughly). I miss the old places on The Strip. I miss the Wizard-of-Oz-themed MGM Grand. I miss everything about the Desert Inn. I sorely miss the off-strip Landmark hotel and casino – so much fun and sooo affordable.

      After the County turns the Drew property into a free-for-all riot venue (for demolition and other purposes and per my suggestion in a previous comment), the property should next be turned into something charming, walkable, and (maybe even) vintage. A respite from the soaring and cold glass-clad towers of the “new” Las Vegas of the last 25 years or so. Make the next development on the property little more motel-ish than hotel-ish, if you will. Give it inviting and walkable outdoor and indoor spaces. Maybe make it more family (gasp!)-friendly and more fun-friendly. How bout a little more personality to the next resort complex on The Strip? I vote yes. The Strip needs more properties with personality like it had in the last Century. Sigh…

      Reply
      1. Rooster

        The problem with that is the cost of the land. You can’t build a small hotel on the strip anymore because you can’t charge enough for the rooms to over the cost of the land.

        Reply
        1. Jenn In Las Vegas

          Again, sell the air right$ to Wynn (Others?), see if you can get an “Opportunity Zone” designation, lobby for any possible tax abatements and/or deferments (maybe the Governor would even call up a special session of the Legislature for the project), and/or etc.

          I do get the intrinsic den$ity problem…. Maybe they (next developer) could get a special social-distancing-development tax holiday?

          Reply
      2. Jenn In Las Vegas

        Another typo:
        *a* little more motel-ish (not: little more motel-ish). Insert “a”. THX.

        Reply
  5. FYMYAWF

    What a clusterf@@k.

    Now what? If Witkoff Group defaults, who even owns it? Does it pass on to the city? If it’ll take billions to complete or millions to demolish, would they even want it?

    I’m thinking the most likely scenario now is it sits as is with whomever the owner is doing just enough maintenance to keep it from falling down. Then in a couple years when the economy has swung back some other big-ego billionaire will take a crack at finishing it again.

    Maybe after we vote Cheeto Man out of office he’ll paint it gold, slap his name on it and call it Trump II. It’s basically right across the street from the other eyesore.

    Reply
  6. NATHAN

    How about selling it to a movie studio (or the city keep it to lease out to studios) for filming? The city makes money, the studios can use a Vegas backdrop for all kinds of pictures and not have to destroy real buildings. Win/win.

    Reply
    1. Jenn In Las Vegas

      Maybe a bird-chopping wind farm? How about a solar panel array? We need to think of something cost effective/economically viable….

      Reply
  7. Brandon Outfall

    The permitting authority should require that the next sale of the property include a $30 million bond to pay for destruction of the existing structure if the property is not developed after 2-3 years. Particulars would of course account for the actual cost of demolition and the financial health of the owner. The time limit would assume that the buyer has immediate access to development capital and a development plan verifiably ready for approval. If they don’t, that’s their problem and not anyone else’s.

    Whatever the considerations, if someone just wants to flip it, run some bankruptcy scam or wants to promote some pie-in-the-sky idea for self-serving reasons that don’t include actual realization of their plan, that’s just fine, but the first $30 million of any transaction gets put up to ensure that when it’s over, there’s nothing left but a secured, clean, vacant lot.

    Reply
  8. WILLIAM WINGO

    Obviously this is a sad day for Witkoff & company, and for the Korean investors; but it’s what I predicted all along, even before the pandemic. I have no inside information, but I’ve seen “urban explorer” videos of the FontaineDrew interior, and clearly it was going to take more than a few buckets of paint.
    Now I further predict that it will eventually end up like the Landmark, imploded or demolished to make way for another convention center parking lot. And that’s really too bad–the view down the strip from that top-level bar would have been spectacular.
    And while I won’t raise this to the level of a formal prediction, I’ll be very surprised if Resorts World ever opens, either.
    NOTE: no politicians’ names have been mentioned in this post.

    Reply
  9. Big Mack in 1 hand, Bible in the other

    Allow Elon Musk a couple of days to figure out what to do with it. If he can’t figure out anything, then go with the Cheeto plan. I couldn’t care less about that dumpsite.

    Reply
  10. Joe Mann

    Check the public records for liens. Various liens filed within the last month reaffirms this article that they are not paying.

    Reply
  11. Jim

    How long are we going to play this game of money laundering, tax write off? Implode this thing and be done with it! There is absolutely no reason why someone/investors could not finish this 90% complete building. Its embarrassing leaving this unfinished building for over a decade in one of the biggest tourist attraction cities in the world.

    Reply
  12. Jorda

    Why was it named The Drew anyway. Such a dumb name. Let’s all go stay with Drew y’all! Hard Rock should buy it if they wanna have a strip property.

    Reply
  13. Jenn In Las Vegas

    Don’t remember the particulars, but I believe it was named after the developer’s daughter. Yes, it was a dumb name.

    Reply
  14. Jenn In Las Vegas

    Thanks for the facts, William. What a jinx to name a casino after/for such an unfortunate event. Dumb on top of stupid….

    Reply
    1. Hornbet

      Gotta feeling they’ll be saying the same thing about the Trump property in about a year, when people reflect on what a disaster the last 4 years had been.

      “What a jinx to name a casino after/for such an unfortunate event.”

      Reply
      1. Jenn In Las Vegas

        FYI: The Trump property in Las Vegas does not have any gaming, does not have any casino. Hornbutt, your ignorance is showing.

        Reply
        1. HornBet

          Yes, that’s why I referred to it as a “property”.
          PS: on the name calling, are we back in 4th grade?

          Reply
          1. Jenn In Las Vegas

            So, Hornbutt, you actually did make reference to a (would-be) Las Vegas Trump gaming/casino property (similarly jinxed). We have it on “video.” Truthfully, Hornbutt, a lot of people, not just you, don’t realize that Trump Las Vegas is not a gaming property. I was just taking a cheap shot at you because of your past transgressions.

            About the other, I am sorry, Hornbutt. It’s not your fault that you have a tendency to be a Leftist troll — you know not what you do or why you do it. I apologize for ridiculing you with 4th-grade name calling. It is not your fault that you have engendered my animus. I am sorry for being sophomoric and confrontational, and I’ll never call you Hornbutt again (unless you give me a good reason).

            Be well. Peace + Love.

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