Marriott to spend $50M for ownership in former Fontainebleau
Hotel giant Marriott International says it will spend $50 million for an ownership stake in the former Fontainebleau property on the Strip.
The unfinished resort, mothballed since the recession and now called The Drew Las Vegas, will be managed by Marriott and feature its Edition and JW Marriott brands.
Marriott President and CEO Arne Sorenson told analysts on Thursday that the project “is going to be spectacular for us long-term” and that his company is “investing $50 million over time in the equity in this project,” according to a transcript on seekingalpha.com.
He said the investment “is likely to yield good positive returns,” but even if it “delivered nothing, it would still be an excellent deal for us because of the strength of the fee stream and the strength of the contribution this hotel will have to our system.”
His comments came during a conference call about Marriott’s fourth-quarter earnings. The Bethesda, Maryland-based company booked $201 million in profit for the three months ending Dec. 31, down 18 percent from the same period in 2016.
New York developer Steve Witkoff and Miami real estate firm New Valley, a subsidiary of cigarette maker the Vector Group, acquired the blue-tinted Fontainebleau for $600 million in August.
The seller, billionaire Carl Icahn, bought it out of bankruptcy for about $150 million in 2010.
Witkoff and Marriott on Monday unveiled the project’s new name and expected opening date of late 2020.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.
