While Dubai struggles with its debt, Las Vegas is this week preparing to inaugurate a blazing 8.5 billion dollar entertainment complex, half of which the ill-suffering Dubai World funded. The debt is not expected to impact on the project.
AFP - Dubai World may be teetering on the brink but one of the firm's key investment projects will roar to life in Las Vegas this week as a glittering 8.5-billion-dollar development is unveiled.
Even by the over-the-top standards that have made Sin City famous, the 18-million-square-foot CityCenter complex of hotels, condos and shops opening in the Nevada gambling capital is unprecedented.
CityCenter, the most expensive privately funded construction project in American history, begins a staged launch to the public this week as the non-gaming 57-story Vdara condo-hotel, the stately 47-story Mandarin Oriental and the gargantuan Crystals shopping center bows ahead of the December 16 grand opening of the 4,004-room casino-resort Aria.
The gleaming complex was built with the help of some four billion dollars of capital from Dubai World after high labor and fuel costs forced MGM Mirage to sell half of the equity in the project to the group.
Yet while debt-ridden Dubai World is fighting for its life, MGM Mirage says CityCenter is essentially complete so their partner's financial woes won't impact the project.
"There is no impact to CityCenter or MGM Mirage as the project is fully funded and management at MGM Mirage were very clever about the deal they structured with DW, protecting them from such an event as default," said Rich Moriarty, an industry analyst for Union Gaming Group.
"MGM Mirage will have right of first refusal in the event the project is liquidated and MGM is responsible for any costs above and beyond the budget."
CityCenter comprises a cluster of gleaming glass-coated buildings on a scant 67 acres of prime real estate at the heart of the Las Vegas Strip immediately south of the famed Bellagio resort.
It is an attempt by MGM Mirage CEO Jim Murren to fabricate urban density in the middle of a city that has largely known only suburban sprawl.
"I firmly believe this is different," Murren said. "It's not a resort in the middle of a parking lot. It's not an isolated building. It's an environment and that's intriguing to people.
"A lot of people that are going to come are going to be really very much pleased with the fact that they can park and wander around an extraordinarily efficient highly engineered and designed environment."
What makes CityCenter dramatically different than its forebears in Las Vegas is that it was created and designed to be a livable urban space with 2,400 condo units available for sale in three different buildings, Vdara, Mandarin Oriental and leaning 37-floor twin towers called Veer that open next year.
Only half of those have been reserved, though, owing to the collapse in the American financial and real estate markets, so Vdara in particular will largely function as a 1,500-room hotel.
MGM Mirage has lowered the prices of the units by as much as 30 percent, but they still range from 350,000 dollars for a studio to 9 million dollars for a Mandarin Oriental penthouse.
Rather than build another Y-shaped resort tower, MGM Mirage recruited a dream team of architects including Rafael Vinoly, Daniel Libeskind, Cesar Pelli and Norman Foster.
They also commissioned or acquired 40 million dollars in public artwork including an 87-foot representation of the Colorado River made out of recycled silver by Maya Lin, the sculptress best known for the Vietnam War Memorial in Washington D.C.
Other artists whose works dot the CityCenter campus include Henry Moore, Frank Stella, Richard Long and Claes Oldenburg and Coosje van Bruggen.
Another priority was eco-friendly construction and operations for which every building opening in December has achieved the highest certification, gold, from the US Green Building Council.
The sheer scale of CityCenter and its emphasis on sustainable materials, for instance, led to the advent of companies in Nevada that can recycle construction waste and provide sustainably produced wood.
CityCenter sprang from an idea first articulated in 2004 by Murren, who holds degrees in urban studies and art history and came to Las Vegas to be chief financial officer for MGM Mirage's predecessor company, MGM Grand Inc., in 1997 at age 36.
But the compressed construction schedule - they broke ground in 2006 -- led to problems including the deaths of six workers and construction defects on another building, The Harmon, that forced MGM Mirage to cut it in half, eliminate plans for condos and delay its opening by at least one year.
Still, as excited as Murren and his staff are about the opening, the complex is opening amid Las Vegas' worst economic downturn, a time when visitation and hotel room rates have both fallen precipitously and when the high home foreclosure and unemployment rates top the nation.
"Now we're going to open this fabulous place into probably the softest Las Vegas environment at least since I first visited Las Vegas in 1969," said CityCenter president Bobby Baldwin.
"This was our best shot. It'll be the people in the audience who will decide whether they like it or not."
Date created : 2009-12-02