Reid ‘saved CityCenter’ after economy crashed
Pounded by foreclosures, job losses and abandoned real estate projects, Las Vegas was a bleak place during the Great Recession.
At the time, the multibillion-dollar CityCenter project on the Strip also was at risk of failing and bringing its developer MGM Mirage down with it.
Harry Reid, however, used his clout to help keep the project afloat.
Then-Senate majority leader Reid and Nevada’s other then-U.S. senator, John Ensign, called CEOs and other top officials at banks and asked them to consider loans for CityCenter, the Las Vegas Sun reported in March 2009.
At the time, a spokesman for Reid said the senator “was asked for help, and he helped,” the paper reported.
“Senator Reid called the banks and asked them to give this project a fair shake,” said the spokesman, who also told the Review-Journal that Reid had “simply been asking banks to take a fair look at MGM’s CityCenter project to ensure that sound banking analysis is driving credit decisions, not irrational temerity over what is sometimes portrayed as a controversial industry.”
‘Devastating on a number of fronts’
Reid, the most powerful Nevadan ever elected to federal office and the longest-serving U.S. senator in state history, died Tuesday at age 82 following a four-year battle with pancreatic cancer.
R&R Partners chief executive Billy Vassiliadis, whose firm created Las Vegas’ “What happens here, stays here” ad campaign, said a few years ago that Ensign’s efforts likely helped CityCenter, but it probably meant more that Reid was involved.
The $8.5 billion complex features the Aria hotel-casino; Vdara, a nongaming hotel; the former Mandarin Oriental (now Waldorf Astoria), a high-rise with hotel and condo units; luxury mall Shops at Crystals; and Veer Towers, two 37-story glass condo buildings that, by design, lean at 5-degree angles.
If construction of CityCenter had been halted, it “would have been devastating on a number of fronts,” Vassiliadis said.
“It would have taken a long time to recover from something like that,” he said.
Bill Hornbuckle, president and CEO of MGM Resorts International, as MGM Mirage is now known, said in a statement Tuesday that thanks to Reid, “Nevada’s economy avoided collapse under the weight of the 2008 financial crisis.”
“Words can’t begin to describe the monumental impact Senator Harry Reid had on Nevada, our country and our industry,” Hornbuckle said.
Reid ‘saved CityCenter’
MGM unveiled plans for Project CityCenter, as it was then called, in 2004, saying it would be an “urban metropolis.”
In a news release announcing the project, MGM’s then-boss Terry Lanni evoked the 1905 land auction that got Las Vegas started, construction of Hoover Dam and other seminal moments in local history.
In summer 2007, MGM announced that government-owned holding company Dubai World was putting $2.7 billion into CityCenter for 50 percent ownership and would buy up to $2.4 billion worth of MGM stock.
Soon enough, however, Las Vegas’ real estate bubble burst, Southern Nevada was ground zero for America’s financial wreckage, and projects across the valley were getting derailed.
MGM landed a big cash infusion after the economy started to plunge, reaching a deal in late 2008 to sell Treasure Island for $775 million. But the cost of CityCenter had climbed, construction defects in the unfinished Harmon hotel sparked a massive court battle involving contractors and the developers, and CityCenter’s owners fought with each other.
Dubai World sued MGM over the project and reportedly stopped putting money into it. The project teetered on bankruptcy, and, as the Review-Journal reported, there was speculation that MGM Mirage itself might file for Chapter 11.
In April 2009, MGM announced it had provided $70 million to cover construction costs at CityCenter, including $35 million that “should have been funded” by Dubai.
Later that month — and some time after Nevada’s senators intervened — MGM and Dubai World agreed to fully fund and finish the project.
“It was my belief that if we could not save CityCenter, we could not save MGM Mirage,” MGM’s then-chief executive Jim Murren said in a December 2009 article in the Review-Journal.
Reid is credited in Las Vegas for helping keep the massive project afloat. Murren, for one, even appeared in television campaign ads for Reid, touting how the senator had “saved CityCenter.”
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.