MGM Downsizes CityCenter

08.01.2009, Lesen Sie hier den Bericht über «MGM Downsizes CityCenter».

Casino operator will cancel condo portion of project on soft gaming environment.

The lights continue to dim on the Las Vegas strip as another hotel-casino company prunes down a planned project to save some much-needed green.

On Wednesday, CityCenter Holdings, a joint venture between MGM Mirage (nyse: MGM - news - people ) and Dubai World, said it would postpone the opening of a luxury hotel and spa and cancel a luxury condominium. Both cancellations are in Las Vegas, highlighting the extent to which America's Sin City is garnering fewer visitors with shallower pockets amid an economic recession.

Shares in MGM Mirage dropped 9.3%, or $1.48, to $14.48, in afternoon trading in New York, despite the casino operator’s expected cost savings of $800.0 million. The stock movement was more indicative of the health of the gaming industry rather than a knee- jerk reaction to CityCenter’s announcement, explained Matthew Jacob, Majestic Research’s senior casino analyst.

The casino industry has been struggling as Americans have been less willing to take risks with their money amid job cuts, tight credit, a housing downturn and a bear market on Wall Street.

"The idea that gaming is a recession-resistant industry is not true... not anymore at least," said JPMorgan analyst Joseph Greff. "This is likely due to the fact that gaming is a more mature and widespread form of entertainment than in prior U.S. downturns and, in the case of the Las Vegas strip, a more expensive consumer-discretionary good." Casino operators are likely to continue to face a difficult time on the Las Vegas strip in 2009, Greff added.

The real estate portion of MGM’s CityCenter project had been a way for the casino operator to defer some of the costs associated with building the 67-acre urban center between the Bellagio and Monte Carlo resorts on the Las Vegas strip, explained Jacob. But with property values falling ever lower it makes sense to build fewer units by cancelling the 200 residential units intended for CityCenter’s Harmon.

In November, MGM said it had agreed to provide up to $1.6 billion to complete its joint venture CityCenter project--a $9.1 billion development of hotels, condominiums and retail outlets--if outside financing could not be secured. (See “MGM Commits Chips To Vegas Project.”) MGM has been trying to scale back costs of developing the project. MGM and joint venture partner Dubai World are both "actively pursuing additional financing" for the project, according to CityCenter.

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CityCenter said construction on the 400-room Harmon Hotel & Spa was being deferred for one year, postponing the opening of the hotel to late 2010 and bringing anticipated cost savings of $200.0 million. The cancellation of the residential condominium component of the Harmon saves $600.0 million.

Other operators in the gaming industry have worked towards improving their liquidity by scaling back or postponing projects. In August, Boyd Gaming (nyse: BYD - news - people ) said it would delay construction of its partially built Echelon casino project on the Last Vegas strip. (See "Boyd Knows When To Fold Them.")Then in November, Las Vegas Sands (nyse: LVS - news - people ) announced it would curtail its developments in the Chinese gambling hub of Macau, and would indefinitely suspend construction of the St. Regis Residence in Las Vegas. (See "Macau Project Mired In Sands" and "Sands Run Out For Macau Workers.") (Earlier that month Sands did say it would go ahead with a project in Singapore, however.) Forbes.com

Über MGM Resorts International Operations, Inc.:

MGM Resorts International (NYSE: MGM) ist ein globales Unterhaltungsunternehmen des S&P 500 mit nationalen und internationalen Standorten, das erstklassige Hotels und Casinos, hochmoderne Tagungs- und Konferenzräume, unglaubliche Live- und Theaterunterhaltungserlebnisse bietet und eine umfangreiche Auswahl an Restaurants, Nachtleben und Einzelhandelsangeboten.

Das MGM Resorts-Portfolio umfasst 29 einzigartige Hotel- und Destination-Gaming- Angebote, darunter einige der bekanntesten Resort-Marken der Branche.

Wir betreiben ein Portfolio von Resorts in Las Vegas, darunter Bellagio, MGM Grand, Mandalay Bay und The Mirage, The Signature, Excalibur, Luxor, New York-New York, Park MGM und weitere. In Las Vegas haben wir auch eine bedeutende Beteiligung an CityCenter, dem legendären Hotel, Kongress-, Einzelhandels- und Restaurantkomplex im Herzen des Las Vegas Strip mit ARIA Resort und Casino und Vdara Hotel und Spa, Crystals Retail und Veer Eigentumswohnungen.

Das Unternehmen expandierte in den USA und auf der ganzen Welt und erwarb kürzlich den Betrieb des Empire City Casino in New York und des Hard Rock Rocksino in Ohio, das in MGM Northfield Park umbenannt wurde.

Im Jahr 2018 eröffneten MGM Resorts MGM Springfield in Massachusetts, MGM COTAI in Macau und das erste Hotel der Marke Bellagio in Shanghai.

Die über 80.000 Mitarbeiter von MGM Resorts weltweit sind stolz darauf, dass ihr Unternehmen als eines der weltweit am meisten bewunderten Unternehmen des FORTUNE Magazine anerkannt wurde.

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