Casino projects stay on track

Apr 1, 2008 7:00 PM

Staff & Wire Reports | Despite the economic downturn and oppressed financial markets, some resort developers have vowed to continue with their projects until completion.

One of the projects, the Cosmopolitan Resort & Casino on the Las Vegas Strip, has been targeted for foreclosure by Deutsche Bank, but the project’s developer said he believes the project can be recapitalized.

"We view this action as a means for Deutsche Bank to expand their ability to engage a greater number of serious potential investors in The Cosmopolitan," Ian Bruce Eichner, chief executive of property developer 3700 Associates LLC, said in a statement last week.

The Cosmopolitan is located on the Las Vegas Strip between MGM Mirage’s Bellagio Resort and its $8 billion CityCenter project, which is slated to open in 2010.

Eichner said Deutsche Bank began foreclosure proceedings in order to protect its interest in the project, which he said is expected to be completed on time in 2009.

"We remain optimistic there will be a successful resolution to the situation," Eichner said. Deutsche Bank, in mid-January, delivered a notice of default on a $760 million construction loan for the condominium-hotel project, which has seen costs climb while the U.S. credit markets have collapsed.

General contractor Perini Building Co. reached an agreement in January under which the bank has continued to fund construction work.

Eichner said there are no plans to alter that agreement.

Meanwhile, the developers of a multi-billion dollar resort on the site of the old Frontier said they intend to continue with plans to bring their Plaza brand to Las Vegas.

Those plans were approved by the Clark County Commission last week.

"We are extremely pleased with today’s County Commission meeting," said Miki Naftali, president and CEO of ELAD Group. "Bringing The Plaza brand to Las Vegas is becoming a reality and we look forward to bringing the internationally recognized brand to new heights with this project."

ELAD COO Daniel Wade said the Plaza project will include an upscale hotel, private residences, retail outlets, modern casino, destination restaurants, entertainment venue and convention complex.

Wade said the final architectural plans should be completed by the end of the year, at which time excavation would begin.

Plans gone awry

It appears that Australian billionaire James Packer is giving up on his plan to build a $5 billion mega resort on the site of the old Wet ‘n Wild water park, just south of the Sahara Hotel.

Packer’s Crown Limited bought an option to purchase the 27 acres for $475 million from Paul Lowden’s company in 2006. That option expires in June.

Packer’s plans included one of the world’s tallest buildings at some 1,800 feet. But the height had to be scaled down to 1,064 feet because of proximity to the airport.

For now, according to published reports, Packer is putting the vacant site back on the market.

Packer’s company has already committed $1.8 billion to purchase Cannery Resorts, and is investing $3 billion in the Fontainebleau resort project, next to Turnberry on the Strip.