Drew Las Vegas casino resort project’s future becomes uncertain as developer defaults on debt obligations
The future of The Drew Las Vegas casino resort in southern Nevada is in danger as emerging media reports claim that Witkoff Group LLC, the massive project’s main developer, has defaulted on a number of its debt obligations.
The 24.5-acre Drew Las Vegas casino resort project on the Las Vegas Strip for the envisaged development of the area was once expected to host the $2.8 billion Fontainebleau but the company failed to do that after its former developer slipped into bankruptcy in 2009 due to hard economic conditions caused by global financial downturn.
However, hopes for the casino resort project resurfaced nearly eight years later when the partially-constructed project was acquired by the current developer Witkoff Group in a deal worth around $600 million. It may be noted here that Witkoff Group LLC, which is headquartered in New York City, is headed by American real estate tycoon Steve Witkoff. After purchasing the project, Witkoff Group renamed it as The Drew Las Vegas that previously aimed to be opened to the public by the end of 2020 but later the year of expected completion of the project was pushed back to the summer of 2022. In other words, it aimed to become the newest casino resort in the southern part of the Silver State by the summer of 2022.
This resurrected $2.5 billion casino resort was supposedly due to be the highest structure in the Sin City at 67-stories, playing host to more than 3,750-room Marriott-branded hotel, a state-of-the-art theater and a huge casino, more than 550 thousand square feet of conference and meeting space, in addition to many other amenities.
The current developer of the project secured nearly $2 billion in financing to help complete the casino resort, but shortage of funds continued to delay it. The list of the project’s backers reportedly included a subsidiary of Hyundai Motor Group, South Korean casino operator Kangwon Land Incorporated, institutional investors like Hana Financial Investment, Mirae Asset Management and NH Investment & Securities.
As the Drew Las Vegas casino resort’s main developer has reportedly failed to make repayments of $500 million to numerous undisclosed American lenders, the future of massive project is once again in danger. The emerging media reports also suggest that the main developer defaulted due to huge business losses caused by the ongoing COVID-19 pandemic.
Notwithstanding recent recovery, hotels in the US suffered a huge decline in their overall occupancy rates and profits in May, mainly due to the impact of the deadly corona virus that has infected millions of people and claimed thousands of lives across the nation.
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