Friday, March 27, 2009
The Las Vegas CityCenter project, what may someday be known as the biggest American White Elephant of the current era of speculative booms and busts (paling in comparison to any number of projects in Dubai) has apparently survived its latest challenge, escaping bankruptcy earlier today after MGM Mirage made a $200 million payment to creditors.
We were there to have a look around last year - just as the credit crisis entered a much more serious phase in September - and it was nothing but calm and tranquility in the sales offices as condos were still being hawked for what seemed like outrageous amounts of money.
The Wall Street Journal provides the latest news in this report($).
MGM Mirage made a $200 million payment due Friday to its City Center project, including the $100 million owed by its now-disgruntled partner Dubai World, to keep the massive resort and casino project from halting construction and potentially falling into bankruptcy.Hmmm... just $8.6 billion? That doesn't sound like a lot of money these days...
There had been speculation that City Center, the $8.6 billion Las Vegas development owned by MGM, would miss the payment and file for bankruptcy protection, putting the completion of the massive project in doubt.
MGM was sued earlier this week by Dubai World, which alleged the troubled casino operator breached the terms of their venture. MGM has said the suit is "completely without merit." Dubai World has blamed MGM for massive cost overruns on City Center.
The City Center project is a stark example of how excesses spawned during a lengthy gambling boom are coming back to haunt the casino industry. The project is so large that thousands of workers depend on it for jobs. Las Vegas has been reeling from a slump in tourism revenue, as hotel-room occupancy rates have dropped, pushing up unemployment in the region above the national average.
You can probably bet on whether they'll finish construction. I'd be surprised if someone wasn't offering odds on that in Vegas...