MGM CityCenter condo contracts cause ire

Jul 7, 2009 5:07 PM
by Ray Poirier | Sometimes the early birds catch worms that are not so tasty. That may be the case of those who jumped in early when MGM MIRAGE Inc. (MGM) made available the high-priced condominiums that will fill its CityCenter project on the Las Vegas Strip.

Fortunately, at least in some cases, sales people will be dealing with current and former management since the initial offering reportedly was made to "friends and family" of MGM MIRAGE. Among the buyers were former chairman and CEO Terry Lanni and his family; current chairman and CEO Jim Murren and the company’s largest single stockholder Kirk Kerkorian.

The problem was featured in a Wall Street Journal article on Monday.

Noted was the effort being made by some buyers who feel market conditions have caused the value of their contracts to have declined. Some seek either price reductions or the refund of their deposits.

Grievances reportedly are being expressed on a website.

Essentially, the principal grievance is that property prices have declined and that existing contracts should be modified accordingly.

Project officials have indicated that they are evaluating the marketplace.

With few gaming companies drawing much interest among investors on Monday, MGM shares fell $0.23 to close at $5.69 each on the New York Stock Exchange.

Question? Comment? E-mail me at: Ray Poirier