In Wake of CityCenter Suit, Another Vegas Project Looks to Move Forward
- Mar 25, 2009
As one Las Vegas mega-project hits a snag, the site for a possible new development is set to go up for auction. Just a day after the announcement of a lawsuit brought by a co-developer of the massive CityCenter project against its partner comes word that a 22-acre parcel for a proposed Asia-themed casino resort will be sold at a bankruptcy auction in May.The Dragon City Hotel and Resort site is located in Las Vegas’ Chinatown, three blocks off the city’s famed Strip. The land is being sold at auction by Spring Mountain Wynn Investments L.L.C., with Chartwell Group L.L.C. handling the sale, which is set to take place on May 16, during the International Council of Shopping Centers Convention. Michael Berland, executive vice president & principal of Chartwell’s accelerated marketing division, said that the site “could be the largest single asset ever sold at an open outcry real estate auction,” noting that the parcel is already fully-entitled for casino gaming. All approvals and zoning permits are in place for a 28-story, 2,200-room hotel (pictured) with 500,000 square feet of gaming, dining, entertainment and conference space. Berland said the property has been appraised for $174 million, with an opening bid set at $27.5 million. But considering the current state of the economy and the constrained credit market, the level of interest among possible investors could be limited. Las Vegas has been especially hard-hit by the financial downturn, as overbuilding and a drastic pullback in consumer spending have conspired to hamstring the market there, causing many headaches for owners and developers. Just yesterday, CPN reported that Infinity World Development Corp.–a subsidiary of Dubai World–had filed suit against MGM Mirage, its development partner on the $8.8 billion CityCenter mixed-use project, after MGM expressed doubts about its financial future in its annual report to the SEC. Infinity World subsequently sued to protect its $4.3 billion investment in the project–significantly more funding than the firm had originally planned to provide. However in an e-mail to CPN, MGM said the lawsuit was “without merit,” and that the firm was ready, willing and able to fund its share of the costs to complete CityCenter. “We look forward to working with Dubai World to resolve any outstanding issues and complete this landmark project,” said MGM.