Marriott just dropped another bombshell, this time concerning the exit from the former Las Vegas Fontainebleau development earmarked to become the JW Marriott in 2023, just a few weeks after they announced their Las Vegas Cosmopolitan Resort & Casino would go to MGM.
Marriott decided that it’s time to exit the ill fated project that was first conceived in 2007, short before the financial turndown which eventually resulted in bankruptcy of the $2B project.
After that the property changed hands several times and is now finally on track to open within the next 2-3 years with Marriott saying as recently as July they intend to start operations in 2023 and run it as the JW Marriott Las Vegas.
Since February of this year the property is owned by Koch Real Estate and in the last three months since the announcement there must have been some form of disagreement between the new owners and Marriott, ultimately causing them both to part ways.
CBS8 News Las Vegas reported this weekend that the project is now off and Marriott is no longer a part of the development.
The Fontainebleau, which has sat empty on the Las Vegas Strip for more than a decade, will no longer become a Marriott-operated property and will operate as a Fontainebleau as originally planned years ago, 8 News Now has learned.
In July, Marriott announced plans to finally open the towering blue building in 2023 as a JW Marriott. A website dedicated to the future hotel has since disappeared. Marriott had said it would operate the 3,700-room property as “the first JW Marriott on the Las Vegas Strip.”
“Marriott recently reached an amicable settlement with the hotel’s owner that has resulted in Marriott exiting the project,” a company spokesperson said in a statement to 8 News Now.
Koch Real Estate Investments bought the 20-acre north Strip property in February for $350 million, records show. The company did not return repeated requests for comment.
In a statement to 8 News Now on Thursday, a spokeswoman for Fontainebleau Development said the hotel would be operated by them. It was unclear Thursday if the building’s name would contain the “Fontainebleau” title, but the spokesperson said the development group would operate it.
“The agreement with Marriott International was made with the building’s previous owner,” she said. “Having come full circle and taken ownership of the site in Las Vegas, we intend to fulfill our original vision and deliver the same extraordinary hospitality experience that our guests have come to expect from Fontainebleau Development.” …
It’s unclear what caused the breakdown between Koch/Fontainebleau Development and Marriott or who the instigator of the termination of this partnership was (sounds a little like it was Fontainebleau themselves).
If they suddenly decided to just run the property themselves and kick Marriott to the curb then Marriott is entitled to substantial fees and compensation for lost business and the development efforts so far invested into this property that have been pretty much up to date considering they were planning to really open this as a JW until recently.
Fontainebleau Development is run by Jeffrey Soffer who is the Chairman and Chief Executive Officer of the company. The name Fontainebleau is a household name since the successful start of the original iconic hotel in Miami Beach and while the name has a lot of success, prestige and nostalgia attached to it that shouldn’t hold true for the Las Vegas Development.
Keep in mind that the financial crisis of the late 2000s was a real threat to Las Vegas as this was the time when the Vegas Mega-projects were just starting up. MGM was in the middle of building City Center which they managed to salvage with the help of investors, Steve Wynn had just opened Encore adjacent to Wynn Las Vegas, the Boyd family was working on their $4.8 billion mixed-use project Echelon which went bust and was then scooped up, just opened as Resorts World this year.
Fontainebleau met the same fate as Echelon and nothing happened to the property ever since in terms of commercial use. 15 years down the drain and it’ll probably not open before 2023 at the earliest in whatever shape or form the new owners desire. In any case Marriott is out of it.
Marriott has lost their future JW Marriott Las Vegas that was scheduled to open in 2023 after apparent disagreements with the new owners who now intend to run the property on their own.
The original Fontainebleau was conceived in the 2000s and never got anywhere, bringing a bit of a bad luck spell onto a development particularly unfortunate in Las Vegas.