Tag Archives: Dubai World

November 18, 2009 · 11:03 AM

Only One Gambling Site in Las Vegas’ New $8.5 Billion CityCenter

AriaIs gambling in Las Vegas becoming passé with the advent of new venues? 

Gaming regulators in Las Vegas last Friday granted preliminary licensing approval for the only casino component inside the $8.5 billion CityCenter project and suggested the revenue mix might be sharply different from the traditional gaming-driven environment that has existed since Las Vegas’ creation. 

During a hearing that lasted more than two hours, the Nevada Gaming Control Board was told not to expect additional gaming inside the multiple hotel, high-rise residential and entertainment complex. 

Aria, pictured, CityCenter’s 4,004-room centerpiece, was designed as the project’s only casino. Vdara and Mandarin Oriental are nongaming hotels, and Veer Tower is strictly residential. 

Executives from MGM Mirage and Dubai World, its 50-50 partner in the development, explained the CityCenter concept, using a promotional sales video and previewing Aria’s first television advertisement in what will be a $20 million marketing campaign. 

Gaming is not the focal point of the 67-acre project. The casino at Aria, roughly the size of Bellagio, will have only 145 table games and 1,940 slot machines, half of which will be linked to a server-based gaming platform. 

Aria President Bill McBeath said the casino’s revenue projections are modeled with Bellagio, but the CityCenter casino has fewer slot machines. He said Aria is designed to have private gambling salons like other MGM Mirage high-end casinos, but the rooms will not be used immediately. 

“There will be cross-marketing between the properties,” McBeath said. Aria will host MGM Mirage’s private Chinese New Year party for high-end customers at the MGM Grand, Bellagio and other company resorts. 

McBeath said Aria’s slot machines are projected to produce roughly $320 win per unit per day. 

During MGM Mirage’s quarterly earning conference call with analysts, City Center Chief Executive Officer Bobby Baldwin said Aria would produce $1.2 billion in revenue in 2010. 

“The (revenue) projections are optimistic,” Gaming Control Board Chairman Dennis Neilander said. “But they seem reasonable.” 

The three-member control board then recommended unanimous approval for Aria. The Nevada Gaming Commission will consider the recommendation this week.

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October 18, 2009 · 4:45 AM

CityCenter in Las Vegas to Cut Condo Prices by 30 Percent

Developers of the $8.5 billion CityCenter on the Las Vegas Strip plan a 30 percent price cut on condos there that people have already agreed to buy, just help close the deals during the recession. 

Company officials announced that CityCenter, co-owned by MGM Mirage and Dubai World, will begin closing on the nearly 2,400 units that have been built in two boutique hotels and two residential towers in January at the reduced prices. More than half of the units are under contract. The price cut roughly parallels the decline in Nevada’s real estate market since the units first went on sale in January 2007. 

The price reductions apply to the 227 units at Mandarin Oriental Las Vegas, the 670 units at the Veer Towers and the nearly 1,500 condo units at the 57-story Vdara Condo Hotel. 

A typical one-bedroom unit of about 800 square feet at the Vdara is now selling for about $674,000, according to an analysis by Bill Lerner of Union Gaming Group. 

Other parts of the 67-acre project include a 4,000-room casino-resort, convention space, hotels and a retail mall. The project is to start opening in December. 

Several casino industry analysts said MGM Mirage and Dubai World, the development arm of the government of Dubai, one of the United Arab Emirates, had to make such a move to close real estate sales in a down market that has been particularly tough in Las Vegas. 

Lerner said in late August that the 30 percent price reductions would bring the Vdara’s prices in line with those at the Trump International Hotel down the street and the nearby Palms Place condo-hotel located 1.5 miles west of the Strip. 

Lerner said MGM Mirage might begin pushing those who have committed to buying units at Vdara toward Veer instead. 

CityCenter was originally supposed to have 200 more condo and condo-hotel units atop the Harmon, but that plan was scrapped when developers delayed the opening of the 400-room hotel portion to 2010.

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March 25, 2009 · 11:18 AM

Las Vegas’ CityCenter Project Facing Collapse?

The very survival hangs in the balance for Las Vegas’ largest employer and the city’s largest construction project- and arguably one of the world’s largest and most expensive buildings.   MGM Mirage, operating nine Las Vegas Strip resorts and employing more than 61,000 workers, is now embroiled in a contentious lawsuit over the $9.1 billion, 76-acre CityCenter development with its half-shared partner, Dubai World through its Infinity World financial subsidiary.  dubaiworld

Analysts said the lawsuit filed Sunday casts a damaging dark cloud over the project and sends more negative signals on the overall financial health of MGM Mirage.   According to the lawsuit, Dubai World, a 50-50 joint venture partner in the CityCenter project, is seeking unspecified damages and wants to be relieved of its obligation under the companies’ agreement, which was struck in August 2007. 

Dubai World, a world-leading business conglomerate suffering from a two-thirds drop in their oil prices – leading some to question if the lawsuit is merely trying to sever their joint venture agreement or simply gain more project control – said MGM Mirage, which is CityCenter’s managing partner, is responsible for mismanagement and cost overruns with the project.  Dubai World further contends that statements by the MGM Mirage in the company’s financial filings last week with the Securities and Exchange Commission constitute a breach of the joint-venture pact and has put the project at risk. 

The lawsuit took the MGM Mirage reportedly by surprise, but theirspokespeople responded vehemently yesterday that they are doing everything they can do and are ready, willing, and more than able to meet all financial obligations and debt holder payments. 

Despite the lawsuit, CityCenter still plans to open in stages, starting in October with Vdara, a nongaming condominium and hotel tower, and Aria, CityCenter’s centerpiece 4,004-room hotel-casino, scheduled to open on December 16.  

MGM Mirage continues to accept job applications, having over 90,000 job applications for the CityCenter project and planning to hire 10,000 employees to boost the staganant Las Vegas economy. 

However, MGM Mirage and Dubai World are still seeking the remaining $1.2 billion in financing to finish the project. 

MGM Mirage received from its lenders last week a two-month waiver to avoid violating its loan covenants.   Some financial analysts believe that MGM Mirage might have to file a Chapter 11 bankruptcy to restructure their $13.5 billion in debt.

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March 4, 2009 · 12:34 PM

MGM Mirage Tapped Out?

What a difference a short time can make in a volatile economy.  Months ago the MGM Mirage had billions of dollars of cash at its disposal, supposedly well insulated for the recession.  Now they are painting a continuing bleak and mgmmiragegloomy picture.   The MGM Mirage tapped last week their remaining $842 million in cash under their $4.5 billion revolving credit line because of the turbulent credit market markets and the “uncertain state of the global economy.” 

On Monday the MGM Mirage stock plummeted to an all-time low of about $3 per share, down about 95 percent from a year ago. 

Despite agreeing to sell the Treasure Island to former New Frontier owner Phil Ruffin for $775 million in December, the MGM Mirage, the Strip’s biggest casino operator, leading entertainment provider, and Nevada’s largest private employer could be facing a bankruptcy Chapter 11 filing if it can’t renegotiate better payment terms with its lenders covering some $7 billion in their outstanding loans.  The MGM Mirage has a little more $1 billion in cash remaining on their balance sheet. 

And if MGM Mirage lenders are not flexible in payment restructuring, also at risk is their new $9.1 billion CityCenter project that has a final $1.2 billion payment owed.   The project has been planned to open in October, with the 4,004-room Aria, the centerpiece hotel-casino, scheduled to open in December. 

Like most other Las Vegas casino operators, MGM Mirage has undertaken numerous cost-cutting and debt restructuring measures over the past year.  But, so far, none have brought them the much needed financial relief.   Talks on a variety of other debt restructuring schemes continue including selling some of their 10 Strip hotel-casinos, other properties, or, failing that, sell part of their CityCenter project and perhaps negotiate with Dubai World, already a 50 percent owner in the project that has invested almost $6 billion, for Dubai assuming a greater ownership stake.

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