Center City Las Vegas

[Scott R.]

Havent seen any talk about this development, with the biggest part set to open just a month away. What's your thoughts on this, New best hotel or a bust? Seems like the approx 7000 new hotel rooms could put a huge damper on the rest of the hotels, including its sister hotel the MGM grand. Seems like the 200+ condos are still selling in this down market, for a whoping 1.7mil each
The 12000 new jobs it will be offering sure seem like it will help there local economy.
around 17 million square feet makes it the biggest property on the strip.
Claims to be the largest privately financed development in the United States. I just dont see it as being anything super special. Whats your thoughts?
Might be time to buy MGM stock!
-Scott
Also shows much developing can actually cost alot more then you plan, orignally set at a 4 billion dollar project ending up costing around 11 billion, and thats with losing 25 storys on one of the hotels!
-Scott

[Richard Warren]

FYI – City Center condos have had significant price reductions. That includes condos that were already under contract. The City Center project had been touted as the savior of Las Vegas for a couple of years until recently. Now the fear is that the project is just going to siphon tourists away from existing properties. The thing is that MGM owns a large portion of the strip hotels so they are, in effect, competing with themselves.

Another note: The media likes to make it sound like Vegas tourism has slowed to a trickle. Nothing could be further from the truth. It is down about 10% based on passenger count at McCarran airport. Instead of 36 million people coming in (3 million a month) it is down to about 32-33 million. That’s still a huge number and the strip is still packed with tourists every weekend. The problem is that the strip properties have over-leveraged themselves to such a degree that they are losing money. They need to operate a maximum capacity and had raised prices to such a degree before the recession just to make a profit. Now they’ve been forced to lower prices and that is killing their bottom line. It wasn’t that long ago that Vegas was one of the best travel bargains around. That started to change when the mega-resorts started popping up.

:cool: