Will the Cosmopolitan get absorbed?

According to a report at Bloomberg.com, the orphaned Cosmopolitan Resort and Casino may get some well established parents. MGM MIRAGE and Dubai World are looking to Deutsche Bank (the current owners of Cosmopolitan) for a $1.2-billion loan needed to finish CityCenter . Deutsche Bank is considering merging the Cosmo with CityCenter and putting up the loan in return for an stake in the combined projects. 

The article goes on to say that MGM MIRAGE has made some changes in order to save money. The changes mentioned incorrectly included the delay of the opening of one hotel and the cancellation of a condo development. Of course, we know both of these changes were due to the rebar issue that plagued The Harmon and not a budget decision.

If this deal goes through, CityCenter will grow to 76.5 acres and have a total cost of $15.1 billion.

There was no mention of how this would affect the pending LEED certification for CityCenter (since Cosmo is not a "Green Building").

Frankly:

Although this may save the Cosmo, I'm not particularly jazzed by this idea.

I was happy to see MGM MIRAGE sell TI to Ruffin and Harrah's entertaining the idea of selling Bally's and Paris to Maloof (owner of the Palms). The thinning of the monopoly. The leveling of the playing field. I think the service level at resorts owned by smaller companies is more attentive and personal. When I'm at Wynn or the Golden Nugget, I feel like I'm in someones personal establishment; when I'm at the MGM Grand, I feel like a number. The big-gun corporations use the same "rules and regulations" in all their resorts - same stuff different hotel. 

Until now, I was very fond of the Cosmo, but if it turns out to be just another MGM joint, it will loose some (if not most) of its allure and intrigue. I still greatly admire the engineering and design aspects of this resort - squeezing all that into an 8.5 acre site is quite a feat. I'm looking forward to exploring it regardless of who owns it. 

I'd like to hear your comments.


 
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  • 2/26/2009 9:09 AM vern wrote:
    First of all I would like to say what a great website. I live in Milwaukee, and my wife and I get to Vegas once a year (I wish it were more). I am a union electrician. I like to keep updated on what is going on in Vegas and your website helps me. I sometimes get obsessed with what is going on out there. There are a lot of changes right now and that is good. There needs to be more private owners and less corporate owners, to give it a homey feel when your spending your hard earned dollars. To me the city center looks like a bunch of office buildings in a downtown setting. The same with the Fontainebleu. Whatever happened to the design of the buildings , like the Bellagio or Caesars. I guess that is just my opinion. A lot of people probably do not care what the buildings looks like. I wonder is MGM will sell off anymore of its casinos to make ends meet? Who knows what the future will bring. Again I would like to say what a great website. Thank you.
    Reply to this
  • 2/26/2009 10:52 AM Brad wrote:
    So, what happens if this deal doesn't go through? Will it go on as busines as usual, or does the Cosmo never open? I think strictly from the geographic placement of the Cosmo, I kind of already consider it part of the City Center. Some people who are not familiar with the ins and outs of Vegas may already consider it part of the City Center.
    Reply to this
  • 2/26/2009 11:08 AM Bob wrote:
    Wow first of all i don't really care who owns cosmo just as long as its built!!

    but still i would hate to see it being sold to city center cause it would go from The Cosmopolitan, to oh just another tower at city center

    and at the cost of city center loosing its "LEED" certification and making possible cutbacks (4 budgeting)to the overall city center design. That i wouldn't do.. but hey as long as its still built i guess we can all be happy with that!!
    Reply to this
  • 2/26/2009 12:40 PM greg wrote:
    have mixed emotions but i think i'd be relieved if this deal goes thru. As a contract holder my only fears is an inferior managing company taking over project. Cosmo is such a prime spot it deals a big name right there. True it may dilute its niche or boutique feel, but at this point it needs to get done, and placed with a value so that banks could finance the closings. with alot of mgm getting going to close before cosmo owners it may make it easier to close. I am preparing to self finance right now, although dont want to. good luck to other owners. long term cosmo wins either way.
    Reply to this
  • 2/26/2009 5:04 PM Chad wrote:
    I always figured this would happen. Cosmo is in the thick of MGM property, and looks very similar to the city center properties.

    There are probably very few other potential buyers out there in this crap market.

    As far as what would happen if no one takes Cosmo... the bank would put the assets under a holding company and hire xyz hotel to manage it until there is a suitable buyer.

    It does suck that the entirety of city center would lose its LEED certification, but MGM could twist some naming and not technically consider it part of CC... who cares though, it's a business decision and there are ways to still market the rest of CC as LEED x certified.
    Reply to this
  • 2/26/2009 5:43 PM Darren wrote:
    I think this is a financially necessary move for both parties. CC is shaping up as a financial disaster. I would expect MGM to sell off several older properties (e.g. Mirage) to reduce their debt load. I will even go out on a limb and predict Aria will eventually be rebranded as the new MGM Grand.
    Reply to this
  • 2/26/2009 8:48 PM derek wrote:
    The unit prices for Cosmo are far higher than today's value. A person who closes on his unit will be 'underwater' immediately, whether one pays cash or finances it. They are offering City Center rooms for $159 a night. How would you like to pay 700k for Cosmo and rent it for that and split with mgt?
    Reply to this
  • 2/27/2009 10:05 PM Nick wrote:
    i think they will come to regret this move if they do buy Cosmo and add it to City Center. It will dilute the already oversupply of rooms here. Wrong deal at the wrong time. What ever happened to W Hotels taking this over?
    Reply to this
  • 2/28/2009 8:15 PM Jim wrote:
    I read today that the MGM is looking at tapping into their line of credit. I hope this is an indication that they could not come to an agreement with the Deutsche Bank. If the MGM did take over I affraid that the Cosmo would be a step child to the operation. I guess I missed the part as to what happened to the Grand (World) Hyatt. I thought they were still in the game to manage the hotel and adjoining units.
    Reply to this
  • 3/22/2009 10:23 AM Julie Moore wrote:
    Can you give me an update on whether the Hyatt Corporation is still on the hook to manage the place if and when it opens. I've looked at the Hyatt website and there is no information about the hotel at all, which indicates to me that Hyatt has pulled out altogether. I am interested because my husband works for Hyatt and we were SO eager to finally get to stay in Vegas!! The Hyatt Lake las vegas was also sold so the only brand in vegas is Hyatt Place which is very small! Help me with any info you may have! Thanks!
    Julie Moore
    Florida
    Reply to this
  • 4/14/2009 12:15 PM ROBERT BASTIAN wrote:
    My wife and I purchased a condo at the Cosmo more than 4 years ago. All we want is our down payment back. This has been truly a regrettable investment!!!!!
    Reply to this
    1. 11/30/2009 12:43 PM daniel wrote:
      Hello,My name is Daniel I purchased at the Costmo and have 20 % down payment.Is anyone know how to get some of money back. Thank you.
      Reply to this
  • 8/5/2009 5:28 AM Italian Translation wrote:
    Hi,
    The unit prices for Cosmo are far higher than today's value. A person who closes on his unit will be 'underwater' immediately, whether one pays cash or finances it. They are offering City Center rooms for $159 a night. How would you like to pay 700k for Cosmo and rent it for that and split with mgt?
    Chris
    Reply to this
  • 8/26/2010 10:33 PM John in Reno wrote:
    As far as I know, the addition of Cosmo to City Center should not affect the pending LEED certification of the main City Center development. All of the paperwork should be either submitted or being compiled and would only include the buildings listed in the original plans and serviced by the City Center central power plant (an important part of City Center's original plan for LEED certification if I remember correctly).

    That said, even if the original City Center buildings receive LEED certification, I'm not sure if MGM MIRAGE would be able to claim that City Center is LEED certified if Cosmo becomes lumped under the "City Center" name. Since the "LEED" designation is Trademarked by USGBC, they could have a say in whether MGM MIRAGE would be allowed to say "City Center" is LEED certified or if they would have to instead label each building as LEED certified. It may come down to this last option due to material problems found during construction. Any major changes from the original construction documents could cause the individual buildings to lose LEED points and possibly miss certification.
    Reply to this
  • 8/27/2010 9:47 AM James wrote:
    I've always expected the Cosmo to end up owned by MGM. It's smack dab in the middle of the MGM Mile. I think that was the plan all along. Call me a cynic.
    Reply to this

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