MGM Mirage officials are betting consumers will come to the $8.5 billion CityCenter

In the 61 months between the announcement MGM Mirage was creating an urban metropolis on the Strip called Project CityCenter and Tuesday’s planned opening of its first hotel, Vdara, the $8.5 billion development seemed to be on constant life support.

Almost as soon as MGM Mirage imploded the shuttered Boardwalk casino on May 9, 2006, to clear a major portion of the CityCenter site, the project seemed to be shrouded in bad news.

The recession, which led to the collapse of the credit markets, and other outside financial factors nearly derailed CityCenter, which saw its budget more than double beyond the initially announced $3 billion to $4 billion.

The project came within hours of filing bankruptcy at the end of March, which would have halted construction and shelved the jobs of 8,500 construction workers. With little time to spare, MGM Mirage was given permission to make a $200 million equity payment to keep the project funded.

The demise of the high-rise condominium market forced MGM Mirage to cut prices for CityCenter’s 2,400 residential units by 30 percent in order to spur sales.

Meanwhile, the tragic deaths of six construction workers between February 2007 and May 2008 overshadowed CityCenter’s promise.

Members of building trade unions walked off the job for a day in June 2008 following the death of the last construction worker to protest safety concerns. CityCenter safety issues were discussed as part of congressional hearings in Washington, D.C., in June 2008 and October.

However, Union Gaming Group principal Bill Lerner, whose company advised MGM Mirage on some of its corporate financial matters earlier this year, believes the public will look beyond the negative news now that CityCenter is opening.

"Not to diminish or downplay the deaths or its financial problems by any means, but consumers coming back to Las Vegas are going to hear about this $8.5 billion thing that is supposed to be incredible from a design perspective that they need to look at," Lerner said.

To MGM Mirage officials, CityCenter is viewed as a paradigm shift of how Las Vegas is looked at by the world. They hope the unveiling of Vdara and the openings later in the week of the Crystals retail center and the Mandarin Oriental Hotel will begin to change public perceptions of the project. Aria, the project’s centerpiece hotel and only casino component, will open Dec. 16.

"I believe in my heart that Las Vegas is evolving as a metropolitan community," MGM Mirage Chairman and Chief Executive Officer Jim Murren said. "CityCenter takes us to another level."

The project is a mix of hotels and high-rise residential buildings designed by world-renowned architects and surrounded by high-end retail and dining. CityCenter displays more the $40 million worth of public art by some of the world’s most revered artists. The project also earned a half-dozen gold certifications for environmental and sustainability aspects.

Michael Green, a history professor at the College of Southern Nevada and a longtime observer of the gaming industry, said if the economy hadn’t tanked, CityCenter would have a vastly different community image.

Instead, Green believes it could be as long as a decade before any company tackles a Las Vegas project the size of CityCenter, if ever.

"Frankly, everything that has happened in Las Vegas over the years has been a leap of faith," Green said. "CityCenter is no different. You’re hard-pressed to find any kind of comparison with CityCenter and anything else ever that has been done in Las Vegas. MGM Mirage is probably the only company that could have pulled this off."

CityCenter nearly bankrupted MGM Mirage.

The recession and rapidly disappearing revenues compounded the Strip casino giant’s corporate financial health while the company tried to manage CityCenter’s ever-growing cost structure.

In late March, MGM Mirage’s 50-50 joint venture partner in CityCenter, Dubai World, sued in an attempt to break the deal. The legal battle nearly caused the project’s bankruptcy. The public feud ended five weeks later and CityCenter was fully funded.

Murren is considered the visionary and driving force behind CityCenter. He believes the project will grow tourism in Las Vegas next year between 5 percent and 10 percent. Completing CityCenter was one of his primary goals when he took over as CEO in November 2008.

"This community would have lost a real opportunity that we would have not been able to replicate," Murren said. "The promise would not have been realized for a decade. I really know that this is going to work."

Construction problems, however, seemed to haunt CityCenter from the outset.

The city’s building trades never tackled a project the size and scope of the 18 million-square-foot development along the Strip’s west side between Bellagio and Monte Carlo.

Building costs soared. Safety concerns over the use of certain construction materials forced MGM Mirage to change the scope of the Harmon Hotel, delaying its completion until next year.

The six construction-worker deaths caused a rift between the unions, general contractor Perini Building Co. and MGM Mirage over safety at the site and another Perini work site at the Cosmopolitan.

The one-day shutdown and picketing activated talks about safety. Perini agreed to address the union’s concerns, which included a safety assessment of the work site, on-site training for all construction workers and full access to the project for union and safety officials.

While trade unions and workers were busy expressing outrage about the lack of safety, a few of their peers raised an issue about worker responsibility.

Ten construction workers were observed by a Review-Journal reporter and photographer consuming alcohol before entering the CityCenter site. Perini expressed shock at the photos, quickly working with subcontractors to terminate all the workers who could be identified in the photos.

Perini officials and union leaders refused to discuss CityCenter last week.

Some analysts have questioned whether CityCenter should have been built in phases, which would have helped manage costs and construction issues.

Murren said that would have gutted the entire vision of CityCenter.

"How do you create an environment in phases?" Murren asked. "What do you do? Create a beautiful casino resort and have signs around the rest of the campus saying, ‘Coming Soon’? You just can’t do that."

Even with the challenges, CityCenter has already achieved milestones.

Every component of CityCenter received Leadership in Energy and Environmental Design Gold Certification from the U.S. Green Building Council, making the project America’s largest sustainable development.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

ad-high_impact_4
Business
The Mansion at MGM boasts hidden luxury
The Mansion at MGM, a hotel within a hotel, features 29 luxury villas for invited guests only. (K.M. Cannon/Las Vegas Review-Journal)
Goodwill of Southern Nevada
Under CEO John Helderman, Goodwill of Southern Nevada has expanded its services including the new home of Goodwill’s Veteran Integration Program. Free job services are paid for by revenues generated by Goodwill's retail stores. In 2017, the sale of donated goods allowed Goodwill of Southern Nevada to train more than 17,000 job seekers. More than 2,500 of those found local jobs. (Las Vegas Review-Journal)
Little bat company on verge of MLB deal
Larry Thein, part owner and one of only three employees of the Tat2 Bat Company of Davenport, Iowa, made the company's first bat in a hog barn. He spoke of the humble origins during a trade show at the Baseball Winter Meetings in Las Vegas, Nev., on Dec. 12, 2018. (Ron Kantowski/Las Vegas Review-Journal)
Texas Roadhouse opens in North Las Vegas
Texas Roadhouse has opened at on Craig Road at Bruce Street in North Las Vegas as part of an emerging "restaurant row." (K.M. Cannon/Las Vegas Review-Journal)
Holiday Parade Lights Up Downtown Summerlin
Holiday parade lights up Downtown Summerlin every Friday and Saturday night through Dec. 22.
Nevada's solar industry on the rebound
In 2015, the Nevada Public Utilities Commission voted in favor of a new tariff structure that reduced net energy metering buyback rates and increased fix fees for residential solar customers.
Apartment complexes selling fast in Las Vegas
Las Vegas’ apartment vacancy rate is among the smallest in the country, and rents are climbing faster than the national average. (LVRJ)
Aristocrat Opens $45M Campus In Summerlin
Aristocrat Technologies Chairman Ian Blackburne discusses the company's growth. (LVRJ)
Sunrise Hospital celebrates 60 years
Sunrise Hospital opened its doors to patients on Dec. 15, 1958. Employees of more than 35 years celebrated at a luncheon Wednesday, Dec. 12, 2018. Jessie Bekker/ Las Vegas Review-Journal.
Maya Cinemas to open soon in North Las Vegas
Moctesuma Esparza, CEO of Maya Cinemas, talks about the newest location in North Las Vegas, set to open Jan. 10. The aim of the theatre chain is to serve latino-centric, underserved communities.
Holiday shopping and returns make this the busiest time of year for UPS
The UPS Las Vegas South facility is the company's busiest pre-load operation in the country, and it's even busier this time of year. (K.M. Cannon/Las Vegas Review-Journal)
Primm’s outlet mall has fallen on hard times
The mall, attached to Primm Valley Resort, opened in 1998. Back then, it was a “textbook, perfect outlet-center location." But now, Primm’s outlet mall has fallen on hard times. Las Vegas Boulevard has endless shopping spots. And there are other outlet malls that don’t require a hefty drive to the state line. Its mortgage-holder foreclosed on the mall in late September.
Miltary auction at Ritchie Bros. Auctioneers
Humvees, ammo cans, construction equipment, field gear and more is on the auction block Friday and Saturday at Ritchie Bros. Auctioneers. About 10,000 items in all are for sale in what GovPlanet bills as the largest auction of its kind.
Las Vegas residents discuss avoiding holiday scams
Las Vegas residents discuss their donation habits and how they avoid giving money to scam charities during the holiday season. (Bailey Schulz/Las Vegas Review-Journal)
Tesla’s Nevada Gigafactory ahead of economic impact expectations
The Tesla Gigafactory’s economic impact on Nevada has exceeded projections, bringing in more than 7,000 jobs. In 2014, Nevada agreed to give the automotive and energy company $1.3 billion in tax abatements. In return, Tesla promised to meet certain requirements in areas like employment and capital investment. As of June, Tesla has brought in a total of $6.05 billion in capital investment, surpassing the $4.95 billion projection. The original contract gave the company until 2024 to make $3.5 billion in capital investments in Nevada. Derek Armstrong, deputy director of the Governor’s Office of Economic Development.
Land sales near the Las Vegas Raiders stadium
Land around the Las Vegas stadium site has been selling for high prices. A few months before the stadium’s groundbreaking, Global Trust Group acquired a 2.5-acre parcel just north of the stadium site. The property sold for $7.25 million, or $2.9 million an acre. Osprey Real Estate Capital and Huntington Hotel Group acquired a 2-acre industrial site just west of the stadium site in late November. The property sold for $6.5 million, or $3.15 million per acre. That's roughly 12 times the average price of land in the valley this year as tracked by Colliers International.
T-Mobile Tech Experience Truck parks in Toshiba Plaza at T-Mobile Arena
The Tech Experience Truck is a state-of-the-art showroom on wheels, with demonstrations that put connected drones, smart cities, augmented/virtual reality and smart tracking. The exhibit shows new wireless technology – including 5G and the Internet of Things (IoT). (K.M. Cannon/Las Vegas Review-Journal)
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents to keep them from teetering off into homelessness. Bizuayehu Tesfaye/Las Vrgas Review-Journal @bizutesfaye
Crowds camp out for Chick-fil-A opening
Dozens of customers camped out 24 hours ahead of the 6 a.m. Thursday opening of the new Chick-fil-A on Rainbow Blvd.
Cheapest listings for sale in Las Vegas
Listed for $39,990, 585 S. Royal Crest Circle, Unit #9 is one of the cheapest homes currently listed for sale in Las Vegas. (Caroline Brehman/Las Vegas Review-Journal)
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Terry Miller discusses Convention Center
Project Manager Terry Miller explains the phases of Convention Center construction.
Zappos treats their team members on Cyber Monday
Zappos rolls out a variety of food, drinks and special activities for all team members at their downtown Las Vegas headquarters for Cyber Monday. (K.M. Cannon/Las Vegas Review-Journal)
Team Hybrid at the 2019-Model Motor Trend International Auto Show
Among the companies showing off the 2019 model cars, Team Hybrid shows off its modified cars. Las Vegas resident David David talks about the team, which is in its ninth year exhibiting at the show, and his show car.
Black Friday Shoppers at downtown Summerlin and at the Arsenal
Black Friday shoppers at downtown Summerlin and at the Arsenal. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfYe
Black Friday shopping in Las Vegas
Black Friday sale shopers express their shopping experience. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Las Vegas Livestock recycling Strip food waste
Las Vegas Livestock collects and recycles food from many Las Vegas Strip companies. (Nicole Raz/Las Vegas Review-Journal)
Black Friday at Fry's
Shoppers line up for deals early on Black Friday at Fry's Electronics on Las Vegas Boulevard South. (Mat Luschek/Las Vegas Review-Journal)
Black Friday shoppers at Best Buy at 5 am
Black Friday shoppers at Best Buy at 5 am on Nov. 23. (Mat Luschek/Las Vegas Review-Journal
Black Friday - 1am Closing Time
Quiet night.
TOP NEWS
News Headlines
Home Front Page Footer Listing
Circular
You May Like

You May Like