The Fontainebleau Las Vegas is a luxury resort and casino on the Las Vegas Strip in Winchester, Nevada. It is owned and operated by Fontainebleau Development; is a sister property to Fontainebleau Miami Beach; and sits on the site previously occupied by the El Rancho Hotel and Casino and the Algiers Hotel. Originally proposed by developer Fontainebleau Resorts, owned by Jeff Soffer, the property's owner and developer has changed several times since the project was announced in May 2005.
The project was designed by Carlos Zapata Studio with Bergman Walls and Associates as the executive architect. Construction began in February 2007, and the hotel tower was topped off on November 14, 2008. The tower rises 67 stories, standing high. When ultimately completed, it would become the tallest occupied building in Nevada.
A group of banks had agreed to finance the project, but was sued by Fontainebleau in April 2009, after it cut off funding. Construction was put on hold two months later, when the project entered Chapter 11 bankruptcy. The Fontainebleau was 70-percent completed, and the opening had been scheduled for October 2009. Carl Icahn purchased the project out of bankruptcy in 2010, but never restarted construction. Seven years later, the unfinished resort was sold to investment firms Witkoff Group and New Valley LLC, which planned to open it as The Drew Las Vegas in 2022. However, construction stopped in March 2020, due to the COVID-19 pandemic in Nevada.
In February 2021, Soffer repurchased the project through his company Fontainebleau Development, with Koch Real Estate Investments as a partner, reinstated the original name of the project, and commenced construction again in November 2021. In its final form, the project was developed at a cost of $3.7 billion, making it the second most-expensive resort in Las Vegas, and opened on December 13, 2023 — including a casino and 3,644 hotel rooms.
History
Background The site of the future Fountainebleau was initially occupied by the Thunderbird hotel and casino, opened in 1948. It was later renamed as the Silverbird, and then as El Rancho, before closing in 1992. Turnberry Associates purchased the property in 2000, for $45 million. The company imploded El Rancho later that year, to make room for a London-themed resort. The project was ultimately canceled because of an economic downturn caused by the September 11 attacks.
A privately held company known as Fontainebleau Resorts was later co-founded by Jeff Soffer, who was the chairman and majority owner of Turnberry Associates. In March 2005, Turnberry Associates paid $97 million to purchase of adjacent property – south of the former El Rancho – that had previously been occupied by the Algiers Hotel. The Algiers was to be replaced by the Krystle Sands, a high-rise condominium project that was cancelled earlier that month. The purchase gave Fontainebleau Resorts and Turnberry a total of .
Fontainebleau Resorts and Turnberry announced the Fontainebleau Las Vegas on May 12, 2005, as a casino and hotel resort, with an expected cost of $1.5 billion. The project would be a sister property to the Fontainebleau Miami Beach hotel, purchased by Fontainebleau Resorts earlier that year. The Las Vegas location would be the second in a planned chain of Fontainebleau resorts. It would be built on the former property of the El Rancho and Algiers, located immediately west of the Turnberry Place high-rise condominium complex. Groundbreaking was initially expected to occur by March 2006, with the project planned to be opened by 2008. Glenn Schaeffer, the former president of Mandalay Resort Group, was hired to oversee the new project as the president and chief executive officer of Fontainebleau Resorts.
The Fontainebleau was designed by Carlos Zapata Studio, with Bergman Walls and Associates serving as the executive architect. The resort would have a total of 3.4 million square feet, including a casino. The hotel tower would have 3,889 rooms, including 2,871 hotel rooms and 1,018 condo hotel units. The resort would also feature two dozen restaurants, a performing arts theater, a spa inspired by the Blue Lagoon in Iceland, and a retail mall. Schaeffer predicted that less than one-third of the resort's revenues would come from its casino.
Initial construction: 2007–2009
Turnberry West Construction began construction of the Fontainebleau Las Vegas in February 2007. The company did not do any of its own work, instead relying on a network of subcontractors. The project was expected to cost $2.8 billion. Publishing and Broadcasting Limited purchased 19.6 percent of Fontainebleau Resorts for $250 million to help fund the project. In June 2007, Fontainebleau Resorts secured approximately $4 billion from a group of banks to pay off debts and to finish its projects, including the Fontainebleau Las Vegas, which was expected to open in fall 2009. The company Ullico would also provide financing to the project.
In July 2007, a 70-person team of ironworkers stopped working in areas of the resort that they said were unsafe. They resumed work after three days, following the implementation of several safety measures. The following month, a construction worker died after a 30-foot fall on the property. Several days later, a large concrete slab in the parking garage fell and caused slabs on two lower floors to collapse. No workers were injured or killed in this incident.
The resort's parking garage was to stand seven stories, with the first two floors to be located underground. In mid-2007, plans were approved to increase the garage to 23 stories. Later that year, residents of Turnberry Place alleged that they were deceived by Turnberry, saying they were never notified of the garage's size increase, which would hamper their views. Other residents were concerned about the impact of noise and pollutants from the new project.
Soffer said Turnberry did a "respectful job" of building the Fontainebleau hotel tower away from Turnberry Place residents. Soffer also stated that the land was zoned for a hotel and casino, and said that residents knew such a project would ultimately be built on the property. Turnberry Place residents asked a district judge to rule on whether the Clark County Commission should have approved the garage re-design, which was alleged to be in violation of a county ordinance; the judge ruled in favor of the project, stating that the re-design was legally approved.
The 67-story hotel tower was topped off on November 14, 2008. Construction had begun before final designs were finished, a common practice for Las Vegas resorts to get them opened sooner. However, this would often result in costly do-over work having to be done. As of mid-2009, there were still areas of the project that had yet to be finalized. Some areas, such as the casino and hotel rooms, had undergone numerous redesigns. Restaurants were among the uncompleted portions of the resort, although many hotel rooms had been finished.
Financial issues: 2009
In April 2009, the project filed a $3 billion lawsuit against the group of banking lenders, alleging that they reneged on their agreement to provide $800 million in funding. The banks stated that the loan was terminated because of an unspecified default, a claim that the lawsuit denied.
The banks largely declined to comment on the case; they denied wrongdoing but did not specify how the project wound up in default. It was later confirmed that the project had gone substantially over its construction budget, and the banks determined that the project was in default under their credit agreement. The banks also alleged that Fontainebleau officials made inaccurate statements to hide the project's financial problems. According to the banks, Fontainebleau wanted $1.3 billion in debt to be forgiven. The sale of condo units had been pivotal to paying off the project's debt, although the 2008 financial crisis and weak demand in the local condo market forced Fontainebleau Resorts to reassess this strategy.
The bank group was led by Bank of America, which began negotiating with Fontainebleau shortly after the lawsuit was filed. Through a separate lending group, the project had $130 million to continue construction while the lawsuit proceeded. However, the second group partially pulled its financing in late April 2009, after the first group rescinded its loan on the project. Work was reduced to skeleton crews, and construction proceeded at a slower pace. In May 2009, Fontainebleau filed an amendment to its lawsuit, stating that Deutsche Bank, part of the main banking group, had a conflict of interest. The bank had an ownership stake in the upcoming Cosmopolitan resort, also under construction on the Las Vegas Strip. Deutsche Bank was accused of "seeking to destroy the Fontainebleau in order to minimize competition" for the Cosmopolitan. The bank was to provide $80 million to the Fontainebleau. The allegations against Deutsche Bank were eventually dropped.
During May 2009, construction consulting firm CCCS International filed a lawsuit against the Fontainebleau, alleging wrongful termination from the project. CCCS was hired as construction manager in 2008. According to the company, Fontainebleau officials said that the project was "severely over budget" and needed a construction manager to provide cost management and auditing services, in order to recover "prior unnecessary overpayments". In its lawsuit, CCCS alleged the discovery of "fraudulent billing practices and inappropriate payment methods" used by the Fontainebleau, stating that this discovery led to its termination. CCCS also alleged that Fontainebleau did not have financing to fund its consulting services, and that the project failed to disclose this. CCCS stated that it was owed more than $1 million. A Fontainebleau spokesman said that CCCS was fired because it failed to perform its duties.
Corporate layoffs began in May 2009, as a result of the bank group withholding its loan. Schaeffer was among those who left the project, without explanation. Schaeffer had been primarily responsible for securing more than $1 billion in loans for the Fontainebleau, and he was to operate the resort's casino.
Bankruptcy Facing numerous liens and financing problems, the Fontainebleau filed for Chapter 11 bankruptcy on June 9, 2009. The project had 1,000 to 5,000 creditors, including various subcontractors who were owed more than $250 million.Retrieved March 8, 2021: Subcontractors wanted a committee formed to represent them in the bankruptcy proceedings, rather than Turnberry West Construction. The $3 billion lawsuit against the bank group was withdrawn and instead refiled in U.S. bankruptcy court. Fontainebleau Las Vegas LLC sought court approval for an immediate $656 million loan from the bank group. However, the banks did not believe that this would be enough to finish construction. Meanwhile, Crown Limited (previously Publishing and Broadcasting Limited) ended any further investment in the Fontainebleau project. On June 11, 2009, it was announced that construction had been halted while the project proceeded through bankruptcy. The project was 70-percent completed, and the opening had been scheduled for October 2009.
A month after the bankruptcy filing, term lenders sued the bank group. Turnberry West also filed a lawsuit against its sister company, Fontainebleau Las Vegas LLC, which owned the project. Turnberry West alleged that its liens against the project took priority over those filed by lenders. Both companies were owned by Soffer. Mediation attempts were unsuccessful, and a judge determined that the case would go to trial. After years of lawsuits, courts ruled in Bank of America's favor; and the bank reached a $300 million settlement with lenders.
Prospective buyers and Icahn ownership: 2009–2015