Fontainebleau Las Vegas is well on its way to opening in December with a preliminary Nevada Gaming Control Board suitability hearing in the rearview mirror and a Nevada Gaming Commission hearing on July 27 which almost certainly result in a recommendation to grant the property a license in November. Then, it’s all blue skies, or Fontainebleau wrapping up the details to open in December – finally, after breaking ground in 2007 and investing nearly $4 billion dollars in the development and surrounding economy.
Long Time in Development, Multiple Setbacks
The nearly 70-floor property has stood out on The Strip for years, at one point, it was swathed in white construction wrapping and called an eye-sore by neighboring businesses when in the hands of another owner.
A quick rundown of the type of property visitors can expect when it is opened all point to a high-end experience with over 400 suites included in a count of over 3,500 hotel rooms.
The casino space will be modest by the percentage of total floor space with about 150,000 sq ft of gaming area holding 128 gaming tables and 1,300 slots. High rollers and mid-rollers will be catered to with nearly 20,000 sq ft of VIP gaming space and over 3,000 square feet of domestic high-limit floor. There will reportedly be 6 Salons Privé. Sports bettors will find a dedicated space of more than 13,000 square feet.
The casino will be at ground level with a retail promenade above it and health and fitness above that. Over half a million square feet of convention and meeting space is included with one area covering over 100,000 square feet making it the second-largest meeting hall in the market.
About half of the dining space will be high-end and the remainder reserved for casual dining. The upscale areas will include international chefs and globally recognized brands.
Nightlife has not been overlooked with a nightclub as well as a day club and a theater to seat nearly 4,000 visitors. Development partner “It’s an arena-size theater stage and it will be a multi-purpose room,” Fontainbleau development partner Brett Mufson said. “We will have residences and host groups and meetings, speaker series, and car events.”
To Employ 7,000+
Nearly 4,000 workers are currently on site and operations will require more than 4,500 full-time workers and nearly 2,000 part-time employees. At full operational capacity, including partner employees, over 7,000 people will be employed with some 250 in executive positions.
At Wednesday’s preliminary hearing, Jeffrey Soffer and Brett Mufson of Fontainebleau Development were found suitable to operate the property. They will face the Gambling Board soon for what usually results in a rubber stamp after a few tough questions that may be left dangling, giving applicants a chance to tidy up any loose ends and give finality to any open questions not fully addressed at the preliminary hearing. In this case, it may be a tax matter from a decade ago and whether any debt forgiveness was included in Soffer’s repurchase of the loan involved in the property.
Soffer was the original developer, but he ran into difficulties when the great recession set in and turned the economy upside down in 2008. The current development also includes the deep pockets of Koch Industries’ real estate investment subsidiary, Koch Real Estate Investments. Raider/investor Carl Icahn owned the property for a while but it didn’t progress toward opening under his ownership.
Concerning the “suitability” issue that was brought up during the hearing, gambling lawyer Frank Schreck provided some detail. Schreck said:
“The focus of the investigation appears to be an analysis of a loan related to the development of Town Square more than 10 years ago. It was purchased from the lender by Jeff Soffer and his sister Jackie. According to Mr. Soffer’s counsel, Rod Rosenstein, the former Acting Attorney General, the issue seems to be whether or not there was any debt forgiveness related to the repurchase of that loan. We are still unsure whether Mr. Soffer’s tax accountants properly accounted for any forgiveness in the complicated transaction.”
Thanks to the consequences of the “Great Recession” of the late 2000s, Soffer reportedly had hundreds of millions of dollars of net operating losses. These would presumably be available on paper to take care of any tax liability.
Second Chances
Soffer has owned the property again since February 2021.
“Soffer said, “It’s been a full circle with this development and I’m excited to be able to finish this. It’s going to be fabulous for Las Vegas. It’s definitely a little different than originally planned. It’s much more upscale.”
According to an article in CDC Gaming Reports, Gaming Control Board Chair Kirk Hendrick didn’t have any concerns about earlier failures of the property during the “economic downturn” of the 2000s.
“I’m very excited for that part of the Strip to see some revitalization and your property move forward,” Hendrick said.
According to local ABC News affiliate KTNV, US casinos made a record-breaking $60 billion in revenue in 2022. Nevada casino operators accounted for $14.8 billion, and casinos on the Strip accounted for more than 10%, or $8.2 billion of the entire nation’s gambling revenues, making the Las Vegas Strip the top gaming market in America. A distant second was Atlantic City with 2022 revenues of $2.8 billion last year.
Source: Fontainebleau Las Vegas on track for November licensing ahead of December opening, CDC Gaming Reports, July 12, 2023