April 1: MGM Keeps CityCenter Alive With $200 Million Payment
MGM Mirage made a $200 million payment on Friday to CityCenter, satisfying the monthly contribution required to keep the project going. The cash-strapped casino company needed a special waiver from its senior lenders to make the payment, $100 million of which was to have been funded by joint-venture partner Dubai World. Dubai World subsidiary Infinity World filed suit against MGM Mirage last Monday, seeking relief from its financial obligations to the project. Infinity World is alleging a breach of contract by MGM Mirage, claiming that doubts about the company's ability to continue operations put CityCenter at risk. MGM Mirage officials, who called the lawsuit "without merit," claim they will work with Dubai World and lenders to find a long-term solution for financing the project.
March 25: Ruffin and MGM Close Treasure Island Deal
MGM Mirage closed the $775 million sale of the 2,885-room Treasure Island Hotel & Casino on the Las Vegas Strip to businessman Phil Ruffin last Friday. Ruffin paid $600 million in cash assets and the remaining $175 million in a secure note; if he prepays that remainder by April 30, he’ll receive a $20 million discount. Ruffin took control of the property immediately upon closing. As a result of the sale, MGM Mirage expects to post a substantial gain in the first quarter.
March 19: LVCVA Suspends Convention Center Work
The board of the Las Vegas Convention and Visitors Authority voted last week to suspend work on the $890 million Las Vegas Convention Center Master Plan Enhancement Program. The authority will review the economy and commercial paper markets in the second quarter of 2010, according to a spokesperson, to determine whether to continue the renovations at that time. Projects already under construction -- which include the relocation of utility lines, new restrooms, a new data center and the nearby Clark County Fire Station 33, among others -- will be completed before work is stopped.
Weidner Out at Sands
Las Vegas Sands announced last week that current board member Michael A. Leven will become president and COO as of April 1. Leven replaces William P. Weidner, who is no longer with the organization.
March 11: LVCVA Estimates Losses
The Las Vegas Convention and Visitors Authority says the city has suffered 340 group cancellations so far in 2009, or 236,700 room nights, equating to an estimated 111,800 lost visitors and a nongaming economic impact of $131.6 million. The LVCVA presented the numbers to its board of directors on Tuesday morning, and outlined an action plan that includes the launch of an informational website, VegasMeansBusiness.com; and client and media outreach. Representatives from the bureau are in Washington, D.C., today and tomorrow, where they are scheduled to meet with the Nevada Congressional delegation and industry groups, including the U.S. Travel Association.
Hilton Tied to Vegas Strip Project
The Las Vegas Review-Journal reported last weekend that Deutsche Bank, which has owned the $3.9 billion Cosmopolitan project since acquiring it at a foreclosure sale in August, reached an agreement with Hilton to manage the Las Vegas Strip casino resort. A Hilton spokesperson declined to comment. The news came as construction on part of the property's west tower was suspended, according to the paper. The Cosmopolitan is scheduled to open in the second quarter of 2010; the property previously was slated to be managed by Hyatt.
March 4: Wynn reports drop in occupancy, revenues
Business levels at Wynn's Las Vegas resorts are "punky and weak," according to chairman and CEO Steve Wynn. In the company's fourth quarter earnings call, the transcript of which can be found at seekingalpha.com, Wynn noted the company made "rather dramatic changes in our operating expenses and our staffing levels" as of the first week in February, after keeping staffing levels high through December and January. (Wynn opened the Encore on Dec. 19.) The company reported losses of $159.6 million in the fourth quarter, down from a $65.5 million profit in 2007. Occupancy at the Las Vegas properties dropped to 86.8 percent in the quarter, down from 92.4 percent the previous year.
Feb. 24: Boyd Gaming Corp. -- the company responsible for the indefinitely stalled Echelon project on the Las Vegas Strip -- wants to buy Station Casinos Inc., which owns and operates 13 casino hotels in the Las Vegas area and has a stake in four more. Boyd has made a cash offer of $950 million for the majority of Station Casino's assets.
Feb. 18: Last week, Las Vegas Mayor Oscar Goodman sent an open letter to President Barack Obama, informing him that his comments during a town hall meeting were harmful to Las Vegas and to the meetings and conventions industry as a whole. Goodman was referring to President Obama's comment about the need for accountability in the way financial institutions spend bailout money, specifically, that financial institutions "can't go take a trip to Las Vegas or go down to the Super Bowl on the taxpayer's dime." Obama's comments, wrote Goodman, "reinforced the stereotype -- unjustified, I may add -- that meetings, events and incentive travel are wasteful and any trip to Las Vegas is a 'junket.' " According to the Las Vegas Sun, Senator Harry Reid said the following day on the Senate floor that he had spoken to chief-of-staff Rahm Emanuel and was assured that Obama's remarks were directed only at the potential use of taxpayer funds for junkets.
January 14: Two major Las Vegas projects have been put off in the past week. Last Wednesday, CityCenter partners MGM Mirage and Infinity World Development Corp. announced they would delay the opening of the 400-room Harmon Hotel and Spa until late 2010, one year after CityCenter is due to open. The developers also have canceled plans for the 200-unit condominium component of the Harmon. On Monday, Caesars Palace announced it would delay the opening of the new 665-room Octavius Tower, previously scheduled to open this coming summer, until room demand increases. Other aspects of the hotel's $1 billion expansion are set to open on schedule, including an additional 110,000 square feet of meeting space, three luxury villas and an expanded pool area.
January 7: Wynn's 2,034-room Encore, a sleek tower that echoes the design of the Wynn Las Vegas next door, opened as planned on Dec. 22. The luxury property is home to five signature restaurants, including the French seafood/steak house Switch, and Sinatra, an homage to the iconic entertainer that serves Italian fare. Encore also features a club, XS, and a variety of upscale shopping establishments.
Tropicana Entertainment LLC filed disclosure statements Monday in federal bankruptcy court in Delaware, revealing some plans for reorganization. To reduce debt and establish a positive cash flow, the debt would be converted to ownership in two entities spun off from Tropicana’s gaming and hospitality holdings: OpCo would consist of 10 properties, including those in Atlantic City and Evansville, Ind., while LandCo would consist of just the Las Vegas property. If approved, the restructuring would increase Tropicana’s financial viability, according to a press release, and give the company greater control over its New Jersey and Indiana properties.