Las Vegas City Center Project Weighs Bankruptcy (foreclosures, hotels)

jfkIII · 03-27-2009, 10:23 AM

Like when the first shovel-full of dirt hit the ground?...probably even before that. If this thing doesn't open...it has the power to bring ALL of LV down...and out! Leaving Las Vegas won't just be a depressing movie...it will become the mantra for a case-study of massive failure. Las Vegas used to be the city of hope...but is quickly becoming the city of failure.

People used to react positively when someone said they were moving out there, almost as if they were jealous that the other person was. Now if someone says they're moving there, the other person asks if they really want to do something like that...as if they are about to make the biggest mistake of their lives. Even visiting there is becoming unfashionable.

Sad times indeed for Las Vegas...and they may even get worse.

spike42 · 03-27-2009, 12:53 PM

Quote:

Originally Posted by jfkIII

Sad times indeed for Las Vegas...and they may even get worse.

Possibly, but not today. From the Wall St. Journal -

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.

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 shares, which were down 19% ahead of the news and halted at $2.51 before the announcement, rebounded afterwards. They traded up 5.2% to $3.25 in recent trading.
MGM said Friday it would work with Dubai World and its lenders to find "a long-term solution for the financing of City Center's completion."

jfkIII · 03-27-2009, 01:06 PM

Good thing for LV!

(If MGM Mirage were Bugsy Siegel...and Dubai World were the mob...and this was the 1940's....MGM Mirage would have been shot in the head through the eye for the cost overruns!)

airics · 03-27-2009, 11:34 PM

dont count it out just yet, looks like you may have spoken to soon... the demise of vegas.. it will be a ghost town, give me a break!

olecapt · 03-28-2009, 12:09 AM

Hmmm...sounds to me like a number of folk here should be lining up to eat their appropriate share of crow...

Where are you guys all of a sudden?

Don't you at least want to pop up and say - "but wait til next time...they won't make it then"....

tony soprano · 03-28-2009, 01:05 AM

I've read this entire thread and can't find anything that someone should be eating crow over, much less multiple people. Can you quote one of the offenders? Are you in the right thread?

aqualung8705 · 03-28-2009, 01:14 AM

Why are there three threads on the same subject? Do you guys hold your conventios under bridges? Be careful of the cow, he licks.

ClarkGrisowld · 03-28-2009, 05:19 AM

You people are insane if you think this project won't eventually be finished. Too close and MGM and Dubai have already sunk too much money into it. Maybe they don't have any more they can put in, but it's so close that SOMEONE would step in to pluck it out of bankruptcy and finish it.

And, no, a delay would not be the worst thing for Vegas. But, yeah, even when the economy recovers all this new supply is still going to weigh on the heavily leveraged casinos ability to service their debt. Otherwise, the casinos still remain cash cows.

ClarkGrisowld · 03-28-2009, 05:34 AM

Quote:

Originally Posted by BobKovacs

The same thing was said when they built the MGM, Luxor, and Treasure Island all at the same time in the early 90's- "Las Vegas can't possibly absorb all of these additional rooms". It was also said when they built the Venetian, NYNY, Paris, etc., and it was said again when Echelon and City Center were proposed. Every time in the past, the critics were proven wrong- this one looks like the straw that broke the proverbial camel's back.

The recent expansion will eventually be absorbed, but it will take a long time, probably 10 possibly 20 years.

The big difference this time around is these decisions were apparently made in a vacuum with complete disregard for the global market. Macao is taking a healthy amount of Asian business (with still more casinos sprouting in the region) and the US is pretty close to being saturated now as well.

Those last few major expansions of Vegas took place when Vegas was still really its own competition. I'd say the model is probably right in terms of competing in that it's much more true travel&leisure as opposed to mostly gaming. That will be more volatile, but ultimately more competitive for tourists and conventioners. In a recession, it won't hold up as well because gaming is only about 40% of revenues now.

The other thing that will need to happen is some properties are going to have to re-position themselves. Everyone can't target the high-end of the market. That segment just isn't big enough. And I think a few other things need to happen to draw more people: You need to expand non-gaming/non-club entertainment options and you need to offer more mid-tier restaurants that aren't buffets/fast-food/chains.

ClarkGrisowld · 03-28-2009, 05:40 AM

Quote:

Originally Posted by jfkIII

But Bob...none of those other properties were built in such dire economic straits. For CityCenter (and Las Vegas as a whole)...it's a perfect storm.

What's going to happen to NY with financial services absolutely devastated?

Not trying to pick-on or single out NY, just pointing out that Vegas isn't the only place struggling. Then you have CA, which is in trouble as a whole state.

Vegas is not dead or dying it just remains an undiversified economy that will suffer more than average during economic downturns.