Gaming Commission licenses Rio operators, finds Fontainebleau developers suitable
New York-based Dreamscape Cos. was approved by the Nevada Gaming Commission on Thursday as the owner and operator of the off-Strip Rio Casino & Hotel, allowing the resort to begin a $350 million, 18-month renovation project.
Earlier in the hearing in Carson City, the commission also granted a preliminary finding of suitability to owners of the under-construction Fontainebleau Las Vegas. Miami-based Fontainebleau Development will have to appear in front of state gaming regulators one more time for full licensing approval before the north Strip resort opens in December.
The Rio and Fontainebleau matters didn’t cover any new ground following the July 12 Gaming Control Board hearing in which the members unanimously recommended approval.
Dreamscape CEO Eric Birnbaum said Rio’s propertywide renovation would start in August and include all areas of the resort, including the casino and restaurant operations.
The company acquired Rio from Caesars Entertainment in December 2019 for $516.3 million. The operations were leased back to Caesars under a four-year agreement while Dreamscape began planning for the renovation. He said Caesars allowed the Rio’s owners to begin some of the renovations earlier this year.
Birnbaum said the Rio will have “an official detachment from Caesars” in October.
“We’re going to begin operating ourselves, so we obviously would never have stopped the lease with Caesars until we knew or felt completely comfortable that our team was ready to take over the transition,” he added.
In February, Dreamscape, which owns hotel properties in eight cities, secured an $850 million financing package, part of which would be used for the Rio redevelopment.
“If you happen to drive by the Rio, you'll see some of the moldings on the outside of the building are getting cleaned up and painted,” Birnbaum said.
The initial focus will be the 1,500-room Ipanema Tower, the oldest of Rio’s two hotel structures. Birnbaum said the newer Masquerade Tower would be renovated in a second phase starting as soon as the first phase is completed.
As for the Fontainebleau, gaming commissioners noted the project’s checkered history.
Fontainebleau Development reacquired the 67-story, blue-tinted-glass hotel-casino in partnership with Koch Real Estate Investments in February 2021, 12 years after walking away from the planned $2 billion development in 2009. At the time, the project was 75 percent complete but the company’s financing dried up.
The building sat vacant under two different ownerships until the company headed by Jeffrey Soffer bought back the property.
“This saga could be worthy of a Netflix mini-series,” gaming commissioner Brian Krolicki said of the property’s history. “I'll call it coming full circle, but I know it's far more complicated than that. This is a wonderful asset and certainly that part of the Strip is getting a much-needed boost from [the] investment.”
Soffer addressed gaming commissioners about a rooftop fire at the Fontainebleau on Saturday and said it wouldn’t delay the planned December opening. He said it was unclear the cause of the fire.
He said he received “calls from hundreds of people saying your building is on fire,” Soffer said. “This building has been a long and crazy story in itself.”
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