The collaborative efforts of Koch Real Estate Investments and Fontainebleau Development are bringing a long-anticipated, multibillion-dollar dream to life on the Las Vegas Strip.
For more than a decade, the Fontainebleau Las Vegas has stood as a grand monument to "what if." Put on pause during the Great Recession in 2009, the partially completed building, already standing high above visitors on the Las Vegas Strip, languished as it passed between owners with failed plans to revive the mega-project and generate the capital needed to do it.
But after years of ups and downs and residents questioning if the project would ever be completed, the project is back in the hands of the original developer who, with the help of Koch Real Estate Investments, will finally turn the enormous potential of the project into reality.
“This is something that we’ve dreamed of for a very long time, and now we can see the culmination of our collective efforts taking shape,” says Fontainebleau Development President Brett Mufson. “When completed, we will have delivered something that I think is going to be very special and very unique to this market.”
The Fontainebleau Las Vegas will be a premier luxury destination featuring more than 3,644 rooms and suites, a casino, luxury shopping, an extensive culinary collection and more than 550,000 square feet of customizable convention and meeting space.
The details of the casino at the Fontainebleau Las Vegas move closer to completion as nearly 4,000 people work to complete the resort.
In partnering with Koch, Fontainebleau was able to secure funding for the resort, an unprecedented $1.8 billion, solidifying its opening timeline and instilling confidence throughout the industry that this long-delayed dream would finally be realized.
“Partnering with Koch Real Estate Investments has allowed us to unlock our vision and the potential for this monumental undertaking,” Brett says. “Koch brings to the table not just capital, but decades of unrivaled business expertise and a successful management philosophy.”
The partnership also provides Fontainebleau with access to capabilities from other Koch companies, such as building products from Georgia-Pacific, Guardian Glass, hospitality management software from Infor and KBX, a Koch logistics company.
“You’re not just partnering with Koch Real Estate Investments, you’re partnering with all of Koch Industries,” says Jake Francis, president of Koch Real Estate Investments. “That brings global capabilities, and decades of experiences and choices, good and bad, which can provide perspective to help make better, more informed decisions.”
A one-of-a-kind project
Completing a project of this scale – the resort is roughly 9 million square feet – would be a complicated endeavor in the best of situations. But everything about restarting and finishing the Fontainebleau brought unique and complex challenges.
“There’s not a lot of buildings that you walk into that started 15 years ago, stop for 12 years and then restart construction again,” says Fontainebleau Development Managing Director for Design and Construction Hunter Clayton. “That’s what we’ve got here.”
Hunter, known to his peers as “the guy who gets things done,” adds that a construction project like this is a complicated and delicate dance of getting the right materials at the right time and place. Any little delay for one item can affect the whole project. To add to the challenge, the team started construction in the middle of the pandemic during a time of severe supply and demand issues.
Working with the Fontainebleau Development team, Georgia-Pacific helped provide huge quantities of gypsum board, like this exterior DensGlass® Sheathing near one of the pools.
Direct access to Georgia-Pacific, Guardian, and especially the logistics solutions from KBX allowed them to tackle even the most challenging problems and helped keep them on schedule. Guardian Glass even restarted a production line to provide a specific glass shower door in the design that had been discontinued.
“Having access to every single aspect, top to bottom, of each of those markets and industries is unmatched,” Hunter says.
More than capital
When Koch Real Estate Investments started, Jake says he never would have thought the company would invest in a Las Vegas resort. When the Fontainebleau Las Vegas property went back on the market, however, he saw an opportunity to apply Koch’s long-term investment framework and capability to bring in the right partners and talent, like Fontainebleau Development, to realize the full potential of the project, stabilize the asset and drive mutual benefit.
“A lot of people make short-term decisions; we make decisions with a long-term point of view,” he says. “We start from a place of trust by creating a shared vision. When you listen to your partners and understand the project, you can creatively structure a capital solution that works for both parties.”
In addition to direct access to Koch’s resource capabilities, Koch Real Estate Investments strives to empower its partners to fully leverage their expertise. They provide access to knowledge such as Koch’s business philosophy, Principle Based Management™, and offer opportunities to help their leaders better understand it.
“They’ve provided important takeaways and lessons for me as a leader of my business that have really added a lot of value,” Brett says.
Koch has also worked with Fontainebleau to partner with local government leaders, community members and unions to ensure completing the project will benefit the whole community. Knowing that the completion of the project would create jobs and value for the area was a significant factor in their decision to buy the property, Jake says.
During the construction phase, nearly 4,000 people are employed at the Fontainebleau Las Vegas site. Once completed, more than 6,500 permanent employees – known as MEMBERS – will be hired to staff the resort.
You'll have a hard time finding a right angle in the interior spaces of the Fontainebleau Las Vegas, which is full of elegantly swooping curves.
“That means good-paying jobs and families who can afford to buy a house,” says Clark County Commissioner Richard “Tick” Segerblom, whose district includes Fontainebleau Las Vegas.
The long layoff that left Fontainebleau Las Vegas unfinished put the idea in some minds that it would never open, Tick adds. Now that its grand opening is just months away, he sees it as a crucial part of the Strip’s future – a driver of global business, leisure and luxury travel, not to mention a key factor in the growth and revitalization of the north Strip.
“Frankly, the completion of Fontainebleau is what makes the difference,” he says. “It’s the glue that’s holding the future of the north end together.”
With this investment, Koch is making a bet on the long-term future of Las Vegas, the capabilities of the team at Fontainebleau and its ability to create value for itself and the communities where it operates.
“It’s something that has gone from an eyesore,” Jake says, “to something we hope will be a real driver of memories and experiences and value for the people who live and work in and visit Las Vegas.”
