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Oct 21, 2009 - 4:02 AM EDT
Michael Johnston submits:Casino operator MGM Mirage (MGM) said on Tuesday that it plans to take a third quarter writedown of nearly $1 billion related to the company’s City Center project in Las Vegas. City Center is a 67-acre mixed-use complex on the Las Vegas Strip complete with residential, retail, and casino real estate. The project has been to the brink of financial ruin and back, almost done in by a difficult economic environment. The casino industry has humbled by the recession, which has caused steep drops in gambling revenues and room rates. Some fear that when the project opens in December, the excess supply could push rates down even further.
The fate of the City Center development reflects the harsh reality facing Las Vegas and the global gaming industry. MGM has also announced that it is cutting condo prices by 30% in light of the recent economic downturn. According to Kevin Kingsbury, many people who had signed contracts on the condo building indicated they would have trouble closing now that finance is harder to come by.
Source: Seeking Alpha (Oct 21, 2009 - 4:02 AM EDT)
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