Casino sales in Vegas don’t always give jackpots
Casino investors pay huge sums to own resorts on the Strip, given the windfalls of cash they hope to get from the properties.
But not every real estate deal in the corridor ends well. Here’s a look at three high-priced sales on Las Vegas Boulevard that did not go according to plan.
Fontainebleau (2017)
When developer Steve Witkoff bought the Fontainebleau for $600 million, he raised hopes that the long-stalled project would finally open.
It eventually did — but not by him.
Witkoff and partners acquired the unfinished hotel-casino in 2017 and later unveiled its new name, Drew Las Vegas, saying it would feature two Marriott brands and debut in late 2020.
Witkoff later pushed back the expected opening to 2022 and said in early 2020 that he was close to obtaining a roughly $2 billion construction loan. But that March, he suspended construction as Las Vegas rapidly shut down over the coronavirus outbreak, and liens and litigation followed.
The Fontainebleau’s original developer, Jeffrey Soffer, teamed with conglomerate Koch Inc.’s real estate wing to reacquire the property in early 2021 for $350 million.
They gained ownership through a “deed in lieu of foreclosure,” property records show.
Soffer — who broke ground in 2007 on the project that went bankrupt in 2009 — finished construction and opened the 67-story luxury resort last year.
New Frontier (2007)
Casino owner Phil Ruffin sold the New Frontier in 2007 for a reported $1.24 billion to Israeli investors, who imploded it that November.
The buyers set out to develop a multibillion-dollar Plaza-branded project. Plans called for 4,100 hotel rooms, 2,600 resort-condo units and more than 1 million square feet of convention, retail, restaurant and casino space combined, Clark County records show.
But Las Vegas’ real estate bubble burst, the economy crashed and the project was never built.
In 2014, Australian billionaire James Packer and partners acquired the vacant site through the foreclosure process, property records show.
Packer’s group also wanted to build a big resort. But he reportedly had trouble raising project funds, and his former casino company Crown Resorts bailed on the project in 2016 and put the land up for sale.
Casino operator Wynn Resorts acquired the site and some adjacent property for $336 million but hasn’t developed a project yet.
Sahara (2007)
Hotel and nightclub operator Sam Nazarian partnered with Stockbridge Capital Group to acquire the Sahara in 2007 for $345 million.
After the economy crashed, they closed the hotel-casino in 2011, with Nazarian saying the “continued operation of the aging Sahara was no longer economically viable.”
In 2012, the owners said they secured $300 million to redevelop the property into the SLS Las Vegas. It opened in August 2014 to big crowds, but issues soon surfaced.
That October, the owners said SLS President Rob Oseland would be replaced, as he was leaving to join another project. Soon after, Stockbridge said Nazarian would step back from the SLS’ day-to-day operations.
Retailer Fred Segal’s seven stores at the SLS closed about a year after the resort opened, and the SLS posted a loss of $122.7 million for the first nine months of 2015.
Alex Meruelo, owner of the Grand Sierra casino in Reno, acquired ownership of the SLS in 2018 and later changed its name back to Sahara Las Vegas.
If there was any confusion about Meruelo’s break with the recent past, work crews demolished the “Sam by Starck” statue out front in 2019, tearing down an homage to Nazarian in a spectacle with fireworks and flames.
A previous version of this story included an outdated reference to the company that partnered to buy the Fontainebleau in 2021. It now goes by Koch Inc.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.