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It seem that project CityCenter has been plagued by problems. Several construction deaths and costly mistakes and now the problem with Dubai World not honoring its financial commitments could spell the end for the project….at least as far as MGM Mirage is concerned.  However, according to Reuters, investor Carl Icahn and private equity fund Oaktree Capital Management have stepped up and acquired hundreds of millions of MGM Mirage bonds. The deal will be a restructuring swapping debt for equity, done in concert with MGM’s majority shareholder Kirk Kerkorian to provide the additional funds needed  by MGM Mirage. The deal still has to be approved by the lenders, but MGM Mirage has a very strong relationship with them going back several years.

MGM Mirage will be cutting it close. Some of their financial covenants are due to expire on April 29 and May 15. Should those defaults come about, MGM Mirage would be forced to file for Ch. 11 bankruptcy protection.

If this deal doesn’t go through, MGM Mirage may sell off other assets like the Beau Rivage in Mississippi or the MGM GRand in Detroit. MGM executives are firmly committed to completing CityCenter which is scheduled to open in October of this year. When completed, it will be the biggest LEED project in the state.

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Las Vegas has always been a town about long odds since its conception. That fact still holds true today, especially with the decline in tourism. In 2008 several smaller home builder went bankrupt, halting projects all over the Las Vegas valley. Westmark Homes, the developer of Mira Villa stopped construction on phase of the project in early 2008 after filing bankruptcy.

Now despite the soft condo market, three banks are coming up with the $37 million in financing to finish the first phase of the development. The phase will have 113 condos and the sales office will be open in June of this year.

Part of the sales strategy will [click to continue…]

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The bankrupt luxury loft project Vantage Lofts by Slade Development is now for sale. The $37.5 million of outstanding principal on the loan held by investment bank George Smith Partners, is in an advanced stage of default. The bankruptcy court has now approved the sale of the partial complete property. The lender is selling the note rather than foreclosing.

At the time construction had halted, three buildings were under construction. The first two buildings were 90% completed, housing 80 lofts. All that needed to be done  were the finishes and some landscaping. The third building is roughly 50% complete. The sale has split the project into two parcels. The southern parcel contains the partially completed buildings.

Vantage Lofts is located in the upper valley of Henderson [click to continue…]

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With the downturn of the economy, MGM Mirage has been putting on a brave front regarding CityCenter. Months ago a “construction defect” caused them to scrap the Harmon condos…..sure it did. I’m sure there were some savings in construction costs that were purely incidental. Earlier they were in talks with Deutsche Bank about providing some additional financing for CityCenter.

Then there were rumors of talks with Australian gambling company Crown Ltd, who recently bought the Cannery on Boulder Highway. Earlier this week, investment discussions between Colony Capital LLC a real estate private equity firm [click to continue…]

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Sullivan Square started out as an unknown project several years ago. The developers started putting out television ads, very artsy targeting the upper middle class. One of its selling points was that the entire community was going to be green and thus eligible for special tax breaks as well as being great for the environment. Last summer the Sullivan Square developer filed suit against its equity partner in the deal, Harcourt Developments, a private company from Dublin, Ireland. The suit was over some $800 million in financing for project.

The case ended up in the Eighth Judicial District Court of Judge Mark Denton. Earlier Judge Denton granted the defendants’ motion to dismiss for lack of jurisdiction on behalf of the individual Irish defendants, along with several of the causes of action in the plaintiff’s first amended complaint (Judge Denton threw out most of the original complaint in December of last year on a technicality). Allegations of conspiracy, negligence, intentional interference and consumer fraud were also dismissed with prejudice. [click to continue…]

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Nothing brings out the bargain hunters like an auction. Or, at least that’s what the developers of the Allure are hoping. The Allure is holding their first condo auction on Saturday, April 18 at 1:00 p.m. Here is an excerpt from the press release:

“We only have ten units available for sale through this special process,” said Sarah Prinsloo, Vice President of Sales and Marketing for Allure Las Vegas. “These luxury residences are part of a limited group of previously cancelled purchase contracts, wherein the buying parties forfeited a significant portion of their deposits when they cancelled. Thus, Allure’s developer is able to offer these units for sale again at great prices.”

Interested parties can preview the units the day of the auction, from 11:00 a.m. to 1:00 p.m. Buyers are required [click to continue…]

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If you having been reading this blog, I’ve been following the Manhattan West development pretty closely since the beginning of the year. I first reported that Manhattan West was in trouble back in January. At that time, the developer Gemstone was actively seeking financing to complete the project, some $350 million dollars.

Earlier this month, the Las Vegas Review Journal reported that Manhattan West developer was not meeting with investors. CEO Alex Edelstein responded to the allegations stating that he would be happy to meet with any legitimate investors about the project. The whole was a he said, she said affair with the upshot being that they still did not have funding.

Several readers have written in, asking how they could get their deposits back. Regarding that there is some [click to continue…]

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Earlier this year I had talked about Manhattan West and its uncertain future. The project developer, Gemstone was looking for additional financing to finish the project. According to an article in the Las Vegas Review Journal, Gemstone CEO Alex Edelstein is in hiding and refused to meet with two “savior” groups. Mr. Edelstein responded stating he’d be happy to meet with ‘bona fide’ investors, but has yet to meet any.

Obviously there is a lot going on behind the scenes. Will Manhattan West become the latest casualty of the credit crisis? The odds are not in Gemstone’s favor. Even though the project offers some of the most unique features and floor plans in Las Vegas, that wasn’t enough. [click to continue…]

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This seems to be a recurring theme for hotel and condominium projects in Las Vegas (and elsewhere, I’m sure): Trouble getting financing. “Necessity is the mother of strange bedfellows” That certainly applies here, since MGM Mirage is in talks with Deutsche bank who happens to own the adjacent property next to CityCenter, the Cosmopolitan. In another twist of the coincidence, Deutsche Bank is looking for someone to operate the Cosmo once it is finished. It’s estimated that MGM Mirage will need another billion dollars to finish the project, which is scheduled to open in October of this year. This is the latest problem to plague CityCenter (see my prior post, CityCenter losses some condos). [click to continue…]

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