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Could CityCenter in Las Vegas cost eclipse $12 billion?

Oct 28, 2008 4:04 PM

Gaming Insider by Phil Hevener |

What’s CityCenter going to cost by the time the doors open, the first slot machine is played and the first resident moves into one of the high-rise condos?

Could the final price tag climb as high as $12 billion?

It’s a figure that has recently been whispered by sources outside the company, people with their own friends inside MGM, people who are not normally given to spreading wild rumors?

The answer depends very much on how the counting is done, what factors are added to or omitted from the equation. The final cost associated with getting CityCenter from where it is now to opening day involves a lot more than architectural fees and the cost of televisions and concrete.

Alan Feldman, the senior vice president in charge of trying to make certain reporters get their facts straight, says the "construction cost" is $9.3 billion. He’s been using that figure for awhile, saying it has not changed and is not going to change … driving that point home with a tone of certainty.

But it is as Feldman gets to the issue of what everything else may cost that the sound of uncertainty begins to creep into things.

There are the collateralized interest costs – a big element considering the difficulty now involved in borrowing –  a variety of pre-opening expenses, the outcome of deals for CityCenter’s high-priced, high-rise tower residences, and, well, the list goes on as MGM makes the deals that are necessary to get from now to opening day.

As for those interests costs, there’s a lot of uncertainty since MGM President Jim Murren has been going here and there meeting with the expected sources of funding.

Finally, we saw last week that the company’s largest shareholder Kirtk Kertrkorian said he was dumping his Ford stock, coming home to Las Vegas, so to speak, the city where he has been a major player for more than a half century to put his arms around his principal asset.

It was an action that may make a big difference at a time when the gaming industry and Las Vegas can use that extra edge.

AC Trop pays off for the lawyers

Gary Stein knows by now that he will be spending the holidays up to his neck in the last job he probably expected to be doing nearly a year after the New Jersey Casino Control Commission asked him to go on over to the Tropicana and keep an eye on things.

It was supposed to be just for a while, only until it can be sold, he was told. He could probably be in and out of there in no more than a few months, he was assured, maybe four or five, certainly no longer than that.

Like, what could go wrong?

How difficult could it be to sell a big hotel and casino on the Atlantic City Boardwalk?

He knows now that the answer to this seemingly rhetorical question is that it can be very difficult, particularly when the owner of the real estate is not interested in seeing it sold and much of the national economy is on life support.

But Stein and the lawyers involved in the Tropicana trauma are doing very nicely, thank you.

Flash forward to last week, past the whirlwind of activity that was part of recent months and it is apparent Stein may now be wondering if he will also be at the Tropicana next Christmas.

The saga of the Trop continues taking unexpected turns through unexpected fields of circumstances.

But at least Stein is being paid, very nicely, too.

The former associate state supreme court justice who still has a law office in northern New Jersey bills at the rate of $675 an hour for the time he spends on Tropicana-related work. His fees so far add up to more than $200,000. But Stein is scarcely the only lawyer who has enjoyed a lot of nice paydays, courtesy of the Tropicana’s troubles.

All the lawyers and operational consultants of one kind or another have billed "far in excess of a million dollars" in fees since last December. One of the Wall Street law firms retained to help with sale efforts has billed at $925 an hour.

It’s a tough job, trying to reclaim a gaming license or overseeing the process. And a well-paying one, at that.