Vegas in Trouble

CNN is reporting very low travel numbers for Las Vegas year to year and although the economy appears to be stabilizing it's not clear that'll prevent severe challenges to the Las Vegas business landscape. Here are the highlights from this Las Vegas economic story:

• State unemployment rate 10.4 percent, convention attendance down 30 percent
  
• Casino slashes room rates, lays off workers -- including 28-year veteran
  
• Mayor Goodman says, "I didn't see this coming," but still optimistic

CNN Reports

CITYCENTER Las Vegas almost complete

CITYCENTER NEARS COMPLETION AS IT TOPS OUT FINAL RESIDENTIAL COMPONENT, VEER TOWERS

LAS VEGAS – May 20, 2009 CityCenter is celebrating a milestone with the recent “topping out” of its dramatically inclining high-rise condominiums, Veer Towers, CityCenter’s only pure residential offering. Preceded by Vdara Hotel, ARIA Resort & Casino and Mandarin Oriental, Veer Towers includes CityCenter’s fourth and fifth high-rise structures and the final residential component to be topped out in preparation of the urban resort destination’s opening later this year.

“The topping out of Veer Towers signifies the final stages of construction for CityCenter as we progress toward its grand opening just months from now,” said Bobby Baldwin, president and CEO of CityCenter. “Veer Towers’ cutting-edge architecture defines the core of CityCenter’s unique urban design. Inclined at five-degree angles – a feature celebrated by the development’s name – the towers will no doubt be an attraction in and of themselves when CityCenter debuts later this year.”

Designed by Helmut Jahn, Veer Towers will be a masterful translation of energy and excitement into physical form; its two glass towers will shimmer day and night and rise above Crystals, CityCenter’s retail and entertainment district. The overall lobby environment, with soaring ceiling heights, will showcase the beauty of its architecture with dramatic glass walls flooded with light, metal statements, exposed concrete walls and modern artwork. Veer residences will be filled with contemporary features and designer-selected fixtures. Open floor plans will feature floor-to-ceiling and wall-to-wall windows that capture spectacular views of Las Vegas and the surrounding CityCenter. Light-filled rooms, natural textures and a range of neutral palettes will infuse streamlined interiors with openness. Modern kitchens, living and dining areas will be ideal for entertaining and spacious spa-styled bathrooms will invite retreat.

Veer’s most compelling attribute will be its striking rooftop amenity floor. Positioned atop each striking 37-story tower, residents will enjoy an amenities floor featuring an unequaled view of Las Vegas complemented by an infinity-edge pool, hot tub, sun deck and patio for outdoor entertaining. Within, Veer will feature a media room; game room; screening room; fitness center with panoramic views; and men’s and women’s separate changing rooms, steam rooms and saunas. Veer’s west tower also will boast a business center and boardroom for residents who wish to conduct business from home.

Owners of Veer residences will enjoy access to the full spectrum of MGM MIRAGE properties in Las Vegas. Benefits include preferred access to MGM MIRAGE’s unequaled resorts, restaurants, entertainment, special events, nightlife, shopping, and golf and spa offerings.

Charting a new course for responsible growth in Las Vegas, MGM MIRAGE is pursuing the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED®) certification at CityCenter. Designed with the environment in mind, Veer residences will feature extensive natural light, dramatically reducing lighting power requirements, and water-saving fixtures throughout. Its glass façades and fins will provide shade from the sun, diverting heat and enhancing circulation of cool air to promote energy-efficient climate control.

Veer Towers is part of CityCenter, a dazzling vertical city set on 67 acres between Bellagio and Monte Carlo resorts. A joint venture between MGM MIRAGE (NYSE: MGM) and Infinity World Development Corp, a subsidiary of Dubai World, the urban development will feature ARIA, a soaring 61-story, 4,004-room resort casino; three non-gaming hotels including Mandarin Oriental, Las Vegas, Vdara Hotel and The Harmon Hotel (opening 2010); approximately 2,400 luxury residences; a resident Cirque du Soleil show celebrating the legacy of Elvis Presley; and Crystals, a 500,000-square-foot retail and entertainment district. For sales information on Veer Towers or to inquire about CityCenter residential opportunities, please call (702) 590-5999, toll-free (866) 708-7111 or visit www.CityCenter.com.

Veer Towers Construction Facts:

• Total concrete for Veer Towers: 55,000 cubic yards
• Floor plan square footage: 853,000 square feet of floor plate (floor area)
• Curtain wall square footage: 326,000 square feet
• Number of stories: 37 floors each tower
• Both towers lean at five degree angles
• At peak, approximately 700 construction workers will work on Veer Towers.

Raku Restaurant makes Travel and Leisure's Top 50 New USA Restaurants List

Raku has made Travel and Leisure's prestigious list of the top 50 new restaurants in the USA:
http://www.travelandleisure.com/restaurants/raku

Although there appears to be no website for this outstanding yet relatively inexpensive Japanese restaurant located somewhat inconspicuously off-strip, it's a definite Las Vegas food attraction for those who value incomparable Japanese Cuisine.

Reviews of Raku at Yelp

MGM Mirage and Dubai World have announced that they have secured financing to complete the CityCenter Project in Las Vegas, and that Dubai World has dropped their lawsuit against MGM Mirage.

The project is one of the most ambitious and expensive community building efforts in the world, and will create a "city within the city" of Las Vegas just off the Las Vegas Strip next to the Bellagio Hotel and across from the Planet Hollywood Complex.

MGM MIRAGE, DUBAI WORLD AND CITYCENTER’S LENDERS

REACH AGREEMENT FOR COMPLETION OF CITYCENTER

Project Receives Approval for Full Financing

Dubai World Dismisses Lawsuit Against MGM MIRAGE

LAS VEGAS, Nevada and DUBAI, United Arab Emirates, April 29, 2009 – MGM MIRAGE (NYSE: MGM) and Dubai World through subsidiary Infinity World, 50/50 joint venture partners in the CityCenter project, today announced that the companies have reached an agreement on a revised joint venture agreement and also reached an agreement with CityCenter’s lenders on a comprehensive plan to fully fund the completion of CityCenter for its scheduled opening later this year.

Under the plan, Dubai World and MGM MIRAGE will fund their remaining equity contributions to CityCenter through letters of credit. In addition, CityCenter’s lenders will immediately fund the full $1.8 billion senior secured credit facility. Additionally, Dubai World will dismiss its lawsuit filed against MGM MIRAGE in Delaware Chancery Court on March 22, 2009, and Dubai World and MGM MIRAGE will exchange mutual releases.

“We are pleased that MGM MIRAGE and Dubai World, with the strong support of CityCenter’s lenders, have agreed to a comprehensive plan for the financing and completion of CityCenter,” said Jim Murren, Chairman and CEO of MGM MIRAGE and Chris O’Donnell, Dubai World's Director of the CityCenter joint venture. “CityCenter is now fully funded and on track to open in December 2009,” they said.

“CityCenter will be unlike anything anyone has seen in Las Vegas or anywhere else. We are confident in the potential of CityCenter to contribute significantly to our cash flow,” said Mr. Murren. “CityCenter is a powerful engine for growth and employment in Las Vegas and Nevada. With all funding in place, we will focus, along with our partner, on planning for an exciting opening in December and continuing to book rooms and conventions. We appreciate greatly the strong support of our lenders, who share our vision as to the importance of this project to the Las Vegas community and the entire state of Nevada.”

Mr O’Donnell said, “This agreement provides a stable financial framework for one of the most exciting destination resort development projects ever to be constructed. MGM MIRAGE is the industry’s premier luxury hotel, resort and casino developer and operator. We believe CityCenter has a bright future and will benefit both the partners and the local economy, and we look forward to working with MGM management to realize that potential.”

Key terms of the various agreements include:

• MGM MIRAGE will be responsible for completion costs to the extent net condominium proceeds are less than $243 million and for completion costs in excess of the current budget of $8.5 billion.
• Dubai World has agreed to fully fund its original sponsor contributions to CityCenter, including $135 million in payments previously funded by MGM MIRAGE on Dubai World’s behalf. Dubai World is relieved of all completion guarantees.

• Until the completion of CityCenter, MGM MIRAGE’s obligations with respect to additional construction costs, if any, will be supported by the assets of Circus Circus Las Vegas and certain adjacent land through a completion guarantee.

• The CityCenter credit facility has been amended as part of the global financing plan. Such amendments include:
• The facility will mature on June 30, 2012.
• The interest rate margin was increased by 2.00%, though such amount is “pay in kind” through September 2010, with additional periodic margin increases through the term of the facility.
• Condominium proceeds of up to $250 million may be used to pay for construction costs; 30% of net condominium proceeds in excess of $250 million will be applied to reduce outstanding borrowings under the credit facility, with the remaining 70% available as distributable cash upon CityCenter satisfying certain performance criteria.
• Certain financial covenants were modified to provide CityCenter with greater flexibility during its first 18 months of operations.

Evercore Partners served as financial advisor to MGM MIRAGE and Moelis & Company and Perella Weinberg Partners served as financial advisors to Dubai World. Glaser, Weil, Fink, Jacobs, Howard & Shapiro, LLP and Morrison & Foerster served as legal advisors to MGM MIRAGE and Paul, Hastings, Janofsky & Walker LLP and Quinn Emanuel Urquhart, Oliver & Hedges served as legal advisors to Dubai World.

# # #

Statements in this release which are not historical facts are "forward looking" statements and "safe harbor statements" under the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including risks and/or uncertainties as described in the company's public filings with the Securities and Exchange Commission.

About MGM MIRAGE

MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected companies with significant holdings in gaming, hospitality and entertainment, owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. CityCenter, an unprecedented urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts in the People's Republic of China, Abu Dhabi, U.A.E. and Vietnam. MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE has received numerous awards and recognitions for its industry-leading Diversity Initiative and its community philanthropy programs. For more information about MGM MIRAGE, please visit the company's website at http://www.mgmmirage.com.

About Dubai World

Dubai World is a leading global corporation focused on five strategic growth areas: Transport & Logistics, Drydocks & Maritime, Urban Development, Investment & Financial Services, and Energy & Natural Resources.

Its portfolio comprises some of the world's best known companies, including DP World, Drydocks World & Dubai Maritime City, Economic Zones World, Nakheel, Leisurecorp, and Istithmar World.

Dubai World's strategy is driven by a combination of pragmatic acquisitions and prudent investments and its corporate philosophy is based on strong fundamentals, best ethical practices and integrity.

www.dubaiworld.ae

Harrah's in debt

As the economy strains both businesses and travel to Las Vegas, the Harrah's empire - the world's largest casino resort group - is in debt trouble. Harrah's owes some 23 billion to creditors and with a 10% drop in revenues last year it is not clear they can sustain this for long.

More at Hotels Magazine

Pressure on MGM Mirage as CItyCenter funding and completion remain in question

MGM Mirage bonds fell dramatically today as the 9 billion dollar Las Vegas CityCenter project, still slated for a December opening, struggles under the pressures of global recession. CityCenter's two key funders are MGM and Dubai World. They are seeking new sources of funding to complete the project, one of the world's most expensive developments.

Howard Hughes Business Plaza CES 2009 266

Howard Hughes Business Plaza CES 2009 266
Originally uploaded by JoeDuck

During my trip to CES I spent time walking the route between Paradise and the Strip which led me throught the new buildings along Howard Hughes Drive, Las Vegas.

The area was eerily quiet and empty even during business hours and I got the idea (still not confirmed) that most of the beautiful and huge buildings were vacant, a product of a US and Las Vegas commercial real estate boom that that has now busted, leaving the CityCenter project in limbo and these buildings unfinished.

I still need to check some stats to confirm as there were some lawyers and real estate offices here and perhaps these are just really nice huge offices without much staff, but I think this is a vision of what is hitting all of the country hard right now - economic deleveraging at an unprecedented pace.