It took less than 90 minutes for Nevada gaming regulators to grant preliminary approvals for two casino-resorts that could reshape the Las Vegas casino market.

The Gaming Control Board, meeting in Carson City Wednesday morning, recommended licensing approval for New York-based Dreamscape Cos. as the owner and operator of the off-Strip Rio Casino & Hotel. In a separate action, regulators recommended a preliminary finding of suitability for the ownership of the long-stalled Fontainebleau Las Vegas.

Both recommendations are subject to final approval by the Nevada Gaming Commission at their meeting on July 27.

While commission approval would allow the Rio’s new ownership to begin a $350 million, 18-month renovation project, owners of the Fontainebleau will need a second hearing with gaming regulators for final licensing approval before the planned opening of the North Strip resort in December.

“We look forward to you being back in front of the board when it's time for your actual application,” Chairman Kirk Hendrick told Fontainebleau executives Jeffrey Soffer and Brett Mufson after a hearing that lasted less than 30 minutes. “So your presentation to us today is very helpful.”

Hendrick complimented the Rio ownership on a “very aggressive property improvement plan,” following a hearing that lasted less than an hour.

Board members asked only cursory questions during the separate hearing items.

Dreamscape CEO Eric Birnbaum told the board the 33-year-old Rio’s property-wide 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.

Birnbaum said the pandemic delayed Dreamscape’s takeover of the Rio earlier but it gave the company time to “implement our business plan, hire the individuals to really steer the ship and really get ourselves into position.”

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.  

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.

“Instead of shutting the entire property down and doing everything all at once, it made sense to do a phased-in approach,” Birnbaum said. “The property is actually doing quite well.”

He noted the hotel room renovations would be done on a floor-by-floor basis, but said a buffer zone between floors would be created in order to diminish any disruption for hotel guests.

Dreamscape executive Trevor Scherrer said the Rio will become a franchisee with Hyatt Hotels Corp., to fill hotel rooms primarily in connection with the property’s 220,000-square-foot convention center space.

“[Hyatt] doesn’t have a property in Las Vegas with convention facilities,” Scherrer said.

Last month, Dreamscape announced it hired four architectural design firms to oversee the remake, including Marnell Companies, the resort’s original developer and operator.

Board member George Assad asked about the Rio’s restaurant plans, noting the property’s buffet was one of the more popular ones in Las Vegas. Birnbaum said the buffet would not return and would be replaced by a food hall concept. He said Dreamscape is also negotiating a deal for the rooftop Voodoo Lounge.

Fontainebleau near completion

Mufson, the president of Fontainebleau Development and CEO of the Las Vegas project, said the property is on track for a December opening after re-taking ownership of the unfinished 3,700-room north Strip hotel-casino in February 2021.

The Miami-based company reacquired the 67-story, blue-tinted-glass hotel-casino in partnership with Koch Real Estate Investments 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 had dried up.

“I get to walk you through the fun part of what exists today from start to finish,” Mufson told the board members at the outset of describing more than two years of construction to complete the property that began construction in 2007. He said the site has employed more than 3,000 construction workers.

“We’re investing approximately $3.9 billion into the Las Vegas economy,” Mufson said, noting the resort is expected to produce a combined $154 million in annual taxes for the state and Clark County.

Soffer, the chairman of Fontainebleau Development, told the board he was “excited and honored to be able to finish” the Fontainebleau.

“I think it's going to be fabulous for Las Vegas,” Soffer said. “It’s definitely a little different than what was originally planned. It’s much more upscale.”

The Fontainebleau will eventually hire roughly 7,100 full-time workers.

Mufson said the 150,000 square-foot casino will include more than 18,000 square feet of high-limit gaming space, a nearly 14,000 square-foot race and sportsbook, along with a poolside gaming area.

Fontainebleau’s meeting and convention space will be 550,000 square feet with an entrance near the West Hall of the neighboring Las Vegas Convention Center. Mufson said the Fontainebleau is “partnering with the LVCVA” for its event space.