Summary

Can the CityCernter 9.3 plus billion dollar project on the Las vegas strip get completed without help from Dubai World? What should we read behind the litigation recently against MGM by D.W.? Could they be looking for a bigger stake in this project?

Analysis

It looks like MGM/Mirage will have to fight just one more battle. This time it's coming from their partner in the new CityCenter. Granted this project has been hit with many cost over-runs. It has gone from a $7 billion plus project to a $9 billion plus project. The original timing to open this beautiful property has also taken a hit by having to open some of this hotel, condo, hotel/casino and more in a piece meal fashion. The Vdara is now scheduled for an October 2009 opening and their hotel/casino operation - 4000 room Aria is looking to open it's doors mid to late December 2009. These two properties, part of the planned six should be able to open without any problems. The problems seems to be getting an additional $1.2 billion in loans to complete the entire package. That's the number that is being put out for general consumption. That is to say, there will be no more increases in construction costs.

So, what is the reason behind Dubai Worlds recent move creating a law suit against MGM for poor showing in recent business. There could more than meets the eye in this move. I am sure that Dubai is feeling the business downturn as all other countries are at this time. Could be they really be looking for a bigger stake in CityCenter and more say as to what MGM is doing. The problem really should be how to complete the CityCenter with Dubai's help. Not their interference......This is an extremely important project for Las Vegas and the State of Nevada. In terms of employment alone it could mean as much as thirty thousand new jobs. A fact that can't be overlooked by anyone. It's a vital for the future survival of MGM. This project can not be left to linger for to long.
Let's hope that these two partners will kiss and make up... it's a vital package for both companies.........

Ron Lodge consults with leading institutions through GLG

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Former Senior Marketing Executive (former), VENETIAN CASINO RESORT, LLC

 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.