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Luck is Running Out for MGM's CityCenter

March 27, 2009 at 12:57 PM | by juliana | 0 Comments

MGM's Project CityCenter: So close, yet so far. The monstrous project in the heart of the Las Vegas Strip was conceived during a boom time for Sin City, a time that no longer exists. Yet even when construction began on the mega-hotel and condominium complex, things were looking really good. So good that a luxe retail center totaling 500,000-square-feet was not just a possibility, it was practically a necessity.

Then the bottom fell out of the economy and the other shoes kept dropping and dropping. Bernie Madoff, AIG, The Big Three, Bail-outs, lay-offs, downsize, salary freezes and other names and phrases have now become part of our daily lexicon.

So it's really no big surprise that CityCenter will most likely file for bankruptcy.

Its partner in the project, Dubai World, has already filed a suit against parent company MGM Mirage for not living up to their end of the bargain. Making it worse, MGM Mirage is saddled with heavy debts. The company is racing to finish construction but without the funds it might not be possible.

The casino company faces a cash crunch as it tries to meet obligations on more than $13 billion in debt. The company narrowly averted defaulting on loans last week and warned that it could default by mid-May, the Wall Street Journal reported.

Missing the payment Friday could halt work on the project within days, idling 8,500 construction jobs, the Journal reported, citing a person familiar with the situation. A delayed opening could also affect 12,000 workers who are to staff the complex, the paper said.

Just last month, two of the hotels within CityCenter were taking reservations. The Vdara hotel is set to open on October 1 and ARIA will follow on December 16. Room rates are currently at $199 for Vdara and we see no change on the website about any delays. But there will definitely be some at CityCenter. As always, we'll keep you posted as we hear them.

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