Not shockingly, a $9 billion construction project that would give Las Vegas even more giant hotels, entertainment venues, and gambling floors is running into funding issues.
The 19 million square foot CityCenter, the largest privately-funded development in US history, stands nearly complete on the Strip, but principal investors MGM Mirage and Dubai World can’t seem to find a final $1.2 billion.
The project, started in 2005 and slated for completion this fall, already has a dodgy history, now standing billions over budget.
Things have gotten so dire that Nevada Senators Harry Reid and John Ensign started working the phones recently, calling banks and asking them to take a second look at financing the scheme–defensibly so, given that at least 12,000 local jobs hang in the balance. (A snapshot of how brutal the employment situation is in Sin City: there have been 90,000 applicants for those positions.)
But Nevada’s senators are asking a tough favor given that revenues in Vegas have fallen to 20 year lows and the prospects for 2009 and 2010 are even worse. As a pure investment, CityCenter looks about as appealing as a dropping large amounts of money into a video poker terminal.
Yesterday things got even bleaker: Dubai World filed a breach of contract lawsuit against nearly broke MGM and seemed to raise doubts about CityCenter’s completion.
If these were funny times, we’d tempted to make some joke about auctioning off the complex and renaming it the White Elephant Hotel and Casino. But… yeah.
