Striking images of daring and delusion in Las Vegas

CityCenter


Ever since the opening of the Moulin Rouge in 1955 naysayers have been predicting that Las Vegas was overbuilt and that the glittering gaming capital was ready to crap out.

A succession of building booms has followed: Steve Wynn’s Mirage in 1989, which many predicted would be a miserable failure; Luxor, Treasure Island and MGM Grand opened in 1993; in 1996, Monte Carlo and New York-New York; in 1998, the first billion-dollar resort, Bellagio, opened; in 1999, Paris Las Vegas, The Venetian and Mandalay Bay opened; and Wynn Las Vegas in 2005, Palazzo in 2007 and Wynn Resorts’ Encore in 2008.

None of the naysayers’ predictions came true. Until now, that is.

The worst economy since the Great Depression, overleveraging by major gaming companies, and the fact that Las Vegas was ground zero for the foreclosure crisis have helped fuel the downturn that has left the industry reeling and a host of half-built reminders of what could have been along the Las Vegas Strip.

In 2007, The New York Times featured a story headlined “Las Vegas Experiencing Another Big Building Boom”. It quoted Wynn talking about the current wave of new construction as “the most outrageous, over-the-top expansion” ever. It cited Las Vegas’ attraction for Americans and foreigners, its 95 percent hotel occupancy rate, and the rising number of empty nesters with the means to spend freely.

And it quoted experts such as Anthony Curtis, publisher of the Las Vegas Advisor, who said, “I suppose one day Las Vegas will reach its limit. But that day is nowhere in sight.”

He was far from the only one with such optimism. But today it’s quite clear from looking at the landscape that the party is over, at least for now.

Octavius Tower Expansion
CAESARS PALACE


Harrah’s Entertainment delayed the opening of its 660-room Octavius Tower at Caesars Palace until hotel room demand increases. The tower is part of a $1 billion expansion plan that includes 110,000 square feet of convention space, three 10,000-square-foot luxury villas and an expanded “Garden of the Gods” pool and outdoor area that did open over the summer as planned.

Status: Completion date unknown.

CityCenter
MGM MIRAGE/ INFINITY WORLD DEVELOPMENT


MGM Mirage’s CityCenter, touted at $8.5 billion as the largest privately funded construction project in U.S. history, will begin to open at the end of this year. Before the credit markets went south, MGM Mirage sold 50 percent of the property to Dubai World, the investment arm of the government of Dubai, through its subsidiary Infinity World Development. The project includes the Aria Resort & Casino, a Mandarin Oriental, the Vdara hotel and condos, the Veer Towers condominiums, a massive retail and entertainment venue called Crystals and the Harmon Hotel and Spa. In 2008, the Harmon was reduced in scope after inspectors found construction defects. Which was just as well because luxury condo sales had flattened at that point and construction funding was drying up. The Harmon was scaled back from 49 floors to 28. Its condominium portion was eliminated altogether. It is not expected to open until sometime in 2010. Last month, MGM Mirage said it planned to take a $955 million write-down on CityCenter for the third quarter.

Status: Opening in phases beginning in December.

The Cosmopolitan

The Cosmopolitan
DEUTSCHE BANK


The $3.9 billion Cosmopolitan is slated to open in late 2010. It is owned by Deutsche Bank AG, the German financial giant, which took it over after its original developer, Bruce Eichner, defaulted on a $760 million construction loan. Deutsche Bank bought the twin towers and their 2,998 condos and hotel rooms in a foreclosure sale in 2008 for $1 billion. Earlier this year the bank wrote down the value of its purchase by $747 million. The project is mired in lawsuits filed by condo buyers, and Deutsche Bank has been offering buyers of units in the West Tower 74 percent of their deposit principal to walk away.

Status: Scheduled for completion in September 2010.

Crown Las Vegas
JAMES PACKER/LVTI/IDM PROPERTIES


Crown Las Vegas was a $5 billion project proposed for Las Vegas Boulevard south of Sahara Avenue. It was to include the city’s tallest hotel, a 1,064-foot extravaganza (second in height only to the Stratosphere). The project was backed by Australia’s Publishing and Broadcasting Limited, led by casino entrepreneur and Crown Limited Chairman James Packer. Its original completion date was 2014, but it was scrapped in March 2008.

Status: Defunct.

Echelon

Echelon
BOYD GAMING


Boyd Gaming’s $4.8 billion Echelon was to have more than 5,000 rooms when it was built on the site of the old Stardust hotel casino. Ground was broken in July 2007. Plans called for a 2,500-room Hotel Echelon, a 650-unit Suites at Echelon, an 850-room Mondrian by Morgans Hotel Group, a 550-room Delano and the Shangri-La Las Vegas, with 71 suites and 282 rooms. Plans also called for a retail promenade, a 750,000-square-foot expo center and associated meeting space, two entertainment venues, multiple restaurants and spas. The project was slated to open in 2010, but on Aug. 1, 2008, Boyd announced it would be delayed because of the poor economic conditions. Today, a chain-link fence surrounds its steel skeleton.

Status: Completion date unknown.

Fontainebleau Las Vegas

Fontainebleau Las Vegas
FONTAINEBLEAU RESORTS


Perhaps the most striking reminder of the economic downturn is the $2.9 billion, 3,900-room Fontainebleau Las Vegas. The 63-story luxury hotel and casino development sits half-finished at the northern end of the Strip after falling into bankruptcy in June when project lenders declined to advance more than $600 million in construction funding. Few believe it is worth the estimated $1.5 billion needed to finish it. Among those who have lost money in the venture is James Packer.

Status: Completion date unknown.

Hard Rock Hotel expansion
MORGANS HOTEL GROUP


Off the Strip, Las Vegas’ Hard Rock Hotel is in the midst of a $750 million expansion. A new 17-story Paradise Tower has opened, and a new 15-story HRH Tower is scheduled to open later this year. The towers give the hotel an expanded room count of 1,525. The expansion also includes a new Joint, its famed live music venue.

Status: Scheduled for full completion in 2011.

M Resort Spa & Casino
MARNELL FAMILY


The $1 billion M Resort opened as planned on March 1 at the far south end of Las Vegas Boulevard. The complex includes a 92,000-square-foot casino, a 400-room hotel and a conference center. MGM Mirage has invested $160 million in the project. Also planned in a later phase is a 1 million-square-foot shopping center to be developed with Taubman Centers.

Status: Open.

Las Ramblas
VARIOUS OWNERS


Las Ramblas, planned along the Harmon Corridor not far from the Hard Rock, was a celebrity-backed megaresort that was to cost $3 billion. Among those involved were actor George Clooney and celebrity bar and lounge developer Randy Gerber, husband of super-model Cindy Crawford. The project, which was to be developed by Related Las Vegas and Centra Properties, never got off the ground.

Status: Defunct.

PH Towers at Planet Hollywood
BH/RE LLC


The 1,201-room PH Towers at Planet Hollywood Resort & Casino is slated to open about the same time as CityCenter in December. It consists of twin 52-story towers with a combined 1,200 units. Originally planned as an all-time-share property, now only 240 units will be time shares, the rest hotel rooms. Planet Hollywood will operate the tower for Westgate, a Florida-based time share company. Two more towers totaling 1,586 rooms are planned, with completion scheduled for November 2013.

Status: Opening in December.

St. Regis
LAS VEGAS SANDS


A year ago, Las Vegas Sands announced it would halt construction on its $600 million, 400-condo St. Regis high-rise bordering the company’s Venetian and Palazzo resorts. LVS said it would consider restarting construction when economic conditions improve. Construction would take 18 months to complete, once restarted, the company says.

Status: Completion date unknown.

The Plaza
ELAD GROUP/IDB


The Plaza, a $5 billion development by the Elad Group, was to be constructed on the site of the demolished New Frontier. Privately held Elad, owner-operators of New York’s famed Plaza Hotel and other landmark hotels, bought the 34.5-acre Frontier from Phil Ruffin for $1.2 billion in 2007. The resort, which was to include a hotel, residences, shops, restaurants and a casino, was to be completed in 2011. It has been put on hold indefinitely, and today the only signs of life on the fenced property are the full-grown trees standing out near the sidewalk in large wooden planters.

Status: Completion date unknown.

Tropicana Las Vegas
ALEX YEMENIDJIAN/ONEX CORP.


A major expansion of Tropicana Las Vegas had been planned with the goal of transforming the aging property and bringing the total number of rooms to 10,000. The project was priced at $2 billion, but after then-owners Columbia Sussex lost their gaming license the plan evaporated. However, since its acquisition by Alex Yemenidjian and Canadian private-equity firm Onex, the property is slated once more for a facelift. Yemenidjian, a protégé of Kirk Kerkorian’s and a former top executive with MGM Grand Inc., has detailed plans to spend $100 million to recreate the Trop with a “South Beach” look and feel.

Status: Phased renovation.