Contractors say they’re owed $36M for work done at Drew Las Vegas

Three months after coronavirus turmoil shut off construction of the Drew Las Vegas, contractors have levied more than $36 million in claims for unpaid bills.

The lead construction team on the north Strip hotel-casino project filed paperwork Monday claiming nearly $18 million in unpaid work. Several other firms, including architecture, demolition and scaffolding contractors, have filed liens since late April as well, claiming they’re owed money for work at the Drew, Clark County records show.

Overall, contractors had filed more than $36.6 million in outstanding liens over the Drew as of Monday.

The claims piled up after Drew owner Steve Witkoff suspended construction of the multibillion-dollar, blue-tinted tower – the unfinished former Fontainebleau – in the chaotic month of March, when the coronavirus pandemic upended daily life and sparked sweeping business closures in Southern Nevada.

Witkoff, through a representative, says he hasn’t given up on the 67-story megaresort on Las Vegas Boulevard.

“This is an unprecedented time, and unfortunately one that affects all hotels, casinos, and construction projects globally,” Witkoff’s namesake real estate firm said in a statement Monday to the Review-Journal. “We remain committed to the project and are actively working with our partners and lenders. We are confident that we will be successful in completing the Drew Las Vegas.”

Volatile history

Liens can always get paid off, and some that were filed after construction stopped have already been released or reduced, records show.

But the burst of claims marks another wobbly chapter for one of Las Vegas’ tallest buildings. The Fontainebleau got started during the frenzied mid-2000s real estate bubble, went bankrupt after the economy crashed more than a decade ago, and, despite getting new owners and a new name, has remained an unfinished skyscraper ever since.

The biggest lien against the Drew is from a joint venture of ‎AECOM Hunt and Penta Building Group, the project’s lead construction team, records indicate. They initially filed a $29.4 million claim early this month but slashed it Monday.

The firms had no comment, a representative for Penta said.

The second-biggest lien, at almost $12.5 million, is from Henderson architecture firm Bergman Walls & Associates. President and CEO Leonard Bergman said his company had no comment.

Witkoff and Miami real estate firm New Valley teamed up to buy the mothballed Fontainebleau for $600 million in 2017. The seller, billionaire Carl Icahn, had acquired the stalled project in 2010 for around $150 million and left it largely untouched.

In early 2018, Witkoff unveiled the project’s new name and scheduled opening date of late 2020. By early this year, he expected to finish the project by fall 2022.

The project — named for Witkoff’s son Andrew, who died of an OxyContin overdose in 2011 at age 22 — is expected to feature nearly 3,800 rooms.

Rapid shutdown

Witkoff told the Review-Journal in January he expected to close on a roughly $2 billion construction loan in the next month or so and usher in a burst of building activity afterward.

But within a few months, the new coronavirus had upended daily life, devastating the U.S. travel industry and shutting down much of Las Vegas’ tourism-dependent economy virtually overnight.

Gov. Steve Sisolak, who ordered casinos and other Nevada businesses closed in March to help contain the virus’ spread, let construction sites remain open during the crisis, alongside hospitals, grocery stores and others.

Southern Nevada homebuilders and commercial real estate developers have kept building during the pandemic, with two major exceptions.

Witkoff’s company announced March 17 that it “paused construction crews” from coming on-site at the Drew and asked corporate employees to work from home.

Two weeks later, developers of MSG Sphere at The Venetian said they were suspending construction and no longer expected to finish the $1.66 billion entertainment venue next year.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. MSG Sphere is a project by Madison Square Garden Entertainment Corp. and Las Vegas Sands.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.