The plan to open The Drew Las Vegas as the newest casino resort in southern Nevada by the summer of 2022 could be in danger after the project’s main developer reportedly defaulted on some of its debt obligations.
According to Monday reports from the news portals at BusinessKorea.com and Mingtiandi.com, the 24.5-acre Las Vegas Strip site for the envisioned development was once due to host the $2.8 billion The Fontainebleau but this impressive scheme ultimately was never completed after going bankrupt in 2009 as a consequence of that decade’s global financial downturn.
However, hopes that this project would one day be finished were reportedly resurrected some eight years later when the Witkoff Group LLC spent approximately $600 million to purchase the partially-built venue with plans to open the now-renamed The Drew Las Vegas by the end of 2020. This refreshed $2.5 billion development was purportedly due to be the tallest building in Las Vegas at 67-stories and play host to a 3,780-room Marriott-branded hotel, a theater and a large casino as well as at least 550,000 sq ft of convention and meeting space.
BusinessKorea.com reported that New York City-headquartered Witkoff Group LLC, which is headed by American real estate mogul Steve Witkoff, subsequently secured approximately $2 billion in financing to help complete the grandiose undertaking although delays had already seen its envisioned opening date pushed back to the second quarter of 2022. Backers purportedly included a subsidiary of Hyundai Motor Group and South Korean casino operator Kangwon Land Incorporated alongside institutional investors such as Hana Financial Investment, NH Investment and Securities and Mirae Asset Management.
However, all of these plans are now in jeopardy with Mingtiandi.com reporting that the developer has recently failed to make payments on around $500 million in financing tied to the Nevada project and supplied by a number of undisclosed American banks. The source purportedly detailed that Witkoff Group LLC is now thought to be seeking a deferment with its business suffering as a direct result of the ongoing coronavirus pandemic.
Despite undergoing a recent slight recovery, hotels in the United States purportedly saw their overall occupancy rates tumble to only about 35% for the week ending on May 23 owing to the nation’s coronavirus-related lockdown. This represents a decrease from the around 70% seen for the same period in 2019 with BusinessKorea.com reporting that most of the country’s operators have already sought credit extensions due to the higher profit volatility of their properties when compared with office buildings.