Question of the Day - 03 September 2018

We think you mean Resorts World Las Vegas and the Drew. Right?

So far as we know, nothing has happened at the latter, other than a lot of talk from owner Steven Witkoff, who says it will provide 7,000 permanent jobs once finished, hopefully in 2020. However, former owner Carl Icahn stripped Fontainebleau of its furniture and custom-designed escalator (which you can now ride at the Downtown Grand) and the “70% finished” claim frequently cited about Fontainebleau probably didn’t include the added-value pool deck, whose unbudgeted expense was one of the factors that drove Fontainebleau into bankruptcy — and Icahn’s arms. 

Witkoff, a New York-based real-estate investor and landlord, benefited enough from the Trump administration’s tax cuts to buy Fontainebleau. Witkoff renamed it The Drew in honor of his son Andrew, lost to an overdose of OxyContin. The completed Drew will be his memorial. 

Witkoff still has to raise $3 billion to finish The Drew, which is a heavy lift in a glutted resort market. He aims to offset the completed resort’s lack of brand equity by teaming with Marriott, marketed under Marriott’s Edition brand, making it the first JW Marriott on the Strip).

Will be it be finished this time? We predict it will. By Witkoff’s 2020 deadline? Probably not, although construction was scheduled to resume last month. So maybe. It will also be run by John Unwin, the CEO under whom the Cosmopolitan stumbled out of the starting gate, so we’ll be watching the business plan with interest. Like the Cosmo, The Drew aims to make its nut on hotel rooms, lounges, and restaurants. 

The same week that President Trump was in town to talk up Witkoff’s project, vertical construction was seen at Resorts World Las Vegas, which has missed at least as many deadlines as Fontainebleau. The steel work was an encouraging sign for a project was has been moving in low gear for quite a few months now. VitalVegas.com blogger Scott Roeben estimates that “a dozen floors had been added” to the hotel podiums as of his last visit. The project, he says, “is definitely picking up speed.” (He hasn’t seen any work at The Drew.) A Roeben photo of the project shows the hotel finally taking on a recognizable form.

Until late June, the most tangible sign that Genting Group was finally getting serious about Resorts World Las Vegas was the affixing of various test windows to the structural steel, probably in part to see what looked best and partly to avoid a repeat of the Vdara Death Ray, where improperly coated glass produced scalp-scorching reflections.

On the downside, Resorts World has even farther to go than The Drew, especially since Genting has redesigned it at least twice since acquiring the unfinished hotel portion from Boyd Gaming, which took a huge loss on the sale ($4 million an acre for land that had been appraised at $15 million per acre). Also, Genting has taken its eye off the ball twice, once buying up real estate in downtown Miami as the site for a megaresort, only to be left high and dry by the legislature. The second time was when Genting put Las Vegas on the back burner in favor of $920 million Resorts World Catskills, which is pulling in less than half the revenue the company projected and whose debt was recently downgraded. 

Speaking of which, Resorts World Las Vegas will have to come roaring out of the gate, performing better than any casino-resort in Vegas history. Under Genting, the budget has ballooned to $7.2 billion, almost as much as it cost MGM Resorts International to build CityCenter. Finishing Resorts World by late 2020 may be the easy part. Getting people to stay and spend there, in a little-visited stretch of the Strip these days, will be the trick.

The likeliest scenario sees Resorts World hanging in there until the Las Vegas Convention Center expansion reaches the Strip in 2021, physically connected to The Drew by a pedestrian bridge. Maybe another delay for Resorts World wouldn’t be the worst thing in the world. Ditto The Drew.