Some rueful condo buyers are probably calling MGM Mirage‘s ultra-mega-super-duper resort “ShittyCenter,” judging by their ire. It’s difficult to know with whom to sympathize in this ongoing dispute. Condo depositors want to renegotiate prices (which range all the way up to $9.4 million/unit) while MGM — though not unsympathetic — maintains buyers got a special deal going in and therefore have relatively little cause for complaint.
Good luck trying to renegotiate the price of that Saturn on which you just made a downpayment. MGM needs those condo purchases if CityCenter is to remain in balance (look what happened to Fontainebleau, which has sold nary a timeshare). And it really can’t afford to start refunding some of that $313 million that depositors have already placed in the kitty.
However … there might be a pragmatic argument to be made for MGM bending to pressure. Condo sales in the valley haven’t been robust — a mere 1,172 units in 2007-08 and a measly 52 closings this year. Scarier still, the Wall Street Journal notes that 7,000 more luxury condo units are under construction as we speak.
There’s basically no market remaining for high-end condos and every unit that goes on sale dilutes the value of a CityCenter aerie just a little bit more. MGM hasn’t been ashamed to offer discounts to players and vacationers. Maybe it’s time to extend that philosophy to condo buyers. If CEO Jim Murren has to sell a few casinos to make up the difference … well, so be it.
Not everybody is having a hard time moving property in this market. J.P. Morgan reports that Starwood Hotels & Resorts Worldwide just sold its W San Francisco for 14X cash flow. Geez, try to get half that multiple for a Strip property and watch potential buyers yawn in your face.
Bernie Goldstein, R.I.P. Not only are there second acts in American lives, the late Mr. Goldstein proved there are third acts as well. The granddaddy of Midwestern riverboat gambling, Goldstein built Isle of Capri Casinos into the first company of its ilk with a recognizable brand identity and saw it outlive several of its rivals. If the company’s business plan went astray in recent years, that doesn’t diminish the scope of Goldstein’s achievement. Thankfully, the gallus-snapping Goldstein was inducted into the American Gaming Association‘s Hall of Fame just in the nick of time.
Congratulations to Roger Thomas for being named the next recipient of the Jay Sarno Award from Casino Design and G2E. While I’m not sure it’s flattering to receive an award named after the man who covered Caesars Palace with unsightly cement mesh and gave the world Circus Circus, it’s the sentiment that truly counts.
Basically, Thomas (and architect DeRuyter Butler) set the template for the last two decades on the Strip and everybody else has been tinkering around the edges. Thankfully, he’s rescinded his retirement from Wynn Resorts, so we can look forward to years more of standard-setting design work.
