Two Way Hard Three | Las Vegas Casino & Design Blog

I'm pretty surprised they said 70% of the condo's have deposits. Last I heard, it was just over 50%. Its been a rough road, but it's good to hear that Vegas is healing, and not going to be the next Lost City.

Jim is a smart guy, and gave a good honest interview. However if he really thinks CC is going to grow the market 5-10% hes crazy. CC at least in the beginning is going to take from the market not give. We should have a nice price war for at least the first 2 quarters of 2010.

Sheesh, and my money is locked up at higher prices too with this company. seriously between MGM's and LVS CEO"s u might have enough of an IQ to tie A shoe! This is worrisome and I dont think City Center will be the turn around the shareholders would like to see, Not in this environment or years to come.

Posted by Dave

Does it mean anything that the two Google ads I see below the original post are for MGM Grand Las Vegas and a bail bondsman?

I give Jim props for not trying to feed us the kool-aid. I came away very impressed. That said, the condos are still going to be a huge problem even if they give 30% price breaks. The market price is more like of a 60% discount. I too wonder about the 70% pre-sold condo number. Also, I don't see how Veer is going to open in Dec. I was under the impression they were just going to finish the skin and leave the interior until later. I foresee Veer taking years to fill up. Have they announced an opening date for the Harmon? They might even wait a couple years to open the Harmon; especially with Cosmo opening next door and targeting the same customer demographic.

Posted by Michael Lu

CityCenter conference call with Bobby Baldwin

http://www.gamingtoday.com/industry-news/story.bv?storyid=22718

Grow the market, that's going to prove very difficult to prove. I'm sure the market will be up next year, vs 2009. So if the market is up 5%, did CC grow the market? Or did, economy improve, and the market just improve with it? I think the next wave of properties, will ultimately grow the market, about every large wave of openings, has in the past. But being able to establish an exact number as to what to attribute that too, we may never know exactly. The fact that MGM is producing positive cash flow, is very positive. They've chopped about every place humanly possible, and if they can make money now, they should really be able to make money once things fully recover. I realize many people on this site, are negative, and think LV will never fully recover, but I disagree, as with all past recessions,...This too shall pass.

Okay, I just don't believe this guy is being totally up front with his numbers. First of all, is he counting Vdara when he says there are 70% sold? I doubt it. If you exclude Vdara but include the original 200 units that were supposed to go into the Harmon that would be a total of 1097 condos outside of Vdara. I do believe it is conceivable that they have sold 70% of that number which would be 768 units of which he says 75% will close. Thats about 576 units out of a total of 2400 ish. Would love to know if anyone can confirm the actual number from MGM. Also, they are bragging about having 132,000 room nights booked. For Aria, with 4004 available rooms, there are 1.46 million available room nights so they have booked less than 10%. Now I wouldn't expect them to have the place fully booked for a year before they open but I believe these room nights are going to come at the expense of other resorts, some of them MGM's own properties. There is no way there will be the kind of visitor increase he is talking about next year. He must be living on a different planet. The good news is that next year will be a good year for the consumer as prices will surely plummet after City Center opens.

Posted by mike_ch

I can't buy it anymore. They've ALWAYS been as optimistic as they are right now, and things didn't go as the planned then, either.

Interesting interview.

I too am not sure what to make of his figures. The Union Gaming research note I got was not as rosy. We're going to record a podcast this week and will almost certainly discuss this.

CNBC also talked with Phil Ruffin about his purchase of Treasure Island:
http://www.cnbc.com/id/32642587/site/14081545

Tom,

Liz Benston had an article in the Sun a few weeks ago that claimed they had about 55% of 2,440 units under contract. I had detailed numbers at one time that I can't find any more, but from memory Vdara was about 45% sold out of 1,540 units before the bubble burst. Subtract around 700 units from Vdara from 55% of 2440 and you get about 650 units sold in Mandarin and Veer out of about 900 available, which is right around 70%. So you're right, there's no way that 70% figure includes Vdara.

The other thing that doesn't add up is that if they have around 1350 units under contract at an average price of, say $800K they should have about $1B under contract with about $200M deposits in escrow (assuming they haven't spent it somehow). But according to Bobby Baldwin they only expect to book $250M from condo sales?? They'll get that if they pocket the deposits and close on next to no units, which right now is not that unlikely a scenario.

Mike P,

Bobby's comments regarding $250M for the condo's really relates to a breakdown of where the money to finish City Center is coming from, not how much overall money will come from condo's. Since they are only going to start closings in Dec, it makes sense that most of the $250M will be from Dec closings and deposits.

Thanks, I misread that.

Here is a link to an email I received from MGM showing interior renderings of Crystals for those who haven't seen it yet.

http://www.arialasvegas.com/ariaconfidentialshopping/?utm_source=aria%2Bconfidential%20shopping%20email%20blast&utm_medium=email&utm_term=shopping&utm_campaign=ARIA%2BConfidential%20Shopping%20Email%20Blast

Mike_ch - I do know what you're saying. And I got your message, about that not being directed at me. But I do realize, how bias I am towards Wynn Resorts. Though, I do own, stock in LVS, MGM, and MPEL also. That still doesn't mean I don't have a favorite. I do think Wynn runs the best company by a pretty big lead. But at some point, you have to look at investments and if you are smart, you'll make investments in companies you may not like, but see value. I really don't like MGM-Mirage. Every good thing about MGM, thus far, you can attribute to someone else. Their best properties somebody else designed, and built. Their best entertainment is because of CDS, which they can thank Wynn for that also. So they just haven't given me much to like. In addition to that, they've downgraded most properties they've taken over. I'll give them credit where credit is due, the volcano at Mirage was a cool change. But the bay at TI, OMG, don't even get me started on that one. They made the casino at Mirage about as plain and lame as I can possibly think off. They simply only know one look. They do it over, and over, and over. I expect City Center to be even more of the same. Now if you want to squeeze every single inch of profit out of a hotel, MGM is your company. So i'll give them credit there, but if they figure out a more profitable use of the land in front of Bellagio, those fountains would be gone. However with the stock under $10 per share, you simply can't overlook this investment. Anyone who has money, and patience will surely be rewarded handsomely over a long period of time.

While I am known for going to Vegas and never leaving Wyncore, I do visit other properties, I just don't tend to stay in them. However, for the recored, I've spent over 100 nights at The Mirage, I've stayed also stayed at TI, Bellagio, MC, Venetian, Stardust, Circus Circus and MGM, many of which many many times. So yes I do consider myself a LV expert, I just prefer Wynn, that's all.

Brian, I'm not sure what it is that you're replying to, but I agree with many of your comments. The reason I'm going to stay at Aria early next year is to see how well MGM can build a property from scratch. The only property they built on their own, MGM Grand, was a disappointment when it opened at the end of 1993. It took years to transform the property into a fairly nice place.
I became a Bellagio fanboy the year it opened, and still think it's Steve Wynn's best work. When Wynn opened, I alternated between the two and liked both, but I would rank Bellagio as #1 if Steve still owned and operated it. I have been troubled by the changes MGM made to the decor. MGM has one, rather bland contemporary style which permeates all its properties. We'll see how that translates to Aria.
Your comment about the lake in front of Bellagio reminds me of the original plans MGM had to build two high-end restaurants using part of the lake area. One was going to be near Jasmine with great lake views. I can't recall why MGM cancelled this because it was well before the economy tanked.
I'm not sure about MGM as an investment. I may regret being out of it, but I'm not convinced CityCenter will succeed in this environment. Jim Murren was a very good salesman in his recent interview, but the condos will be a huge problem, and I believe Aria will cannibalize at least for the first couple years.
Well, we'll be able to judge Aria for ourselves in just 103 days!

For some reason, the Crystals mall smacks of an 1980's mall to me. I'm sure it will be nice, but after seeing the design details on the video link provided by Tim, I can't help myself think of all those malls many of us remember from our younger days, the ones we all had in our neighborhood, trendy, neon lights, fountains, often geometric patterns to their floor designs and balconies...etc. I guess what was once popular can be revived again. This video below sums it up for me, tell me you don't see a bit of Crystals in these 30 year old mall photos.

http://www.youtube.com/watch?v=PHyRink9qVw&feature=PlayList&p=8D4FE4741647D825&playnext=1&playnext_from=PL&index=21

Hunter, my itunes hasn't downloaded the latest podcast yet. I'm hoping it will be in my Saturday morning stocking? Thanks.

To Brian's point, about MGM, being a value at under $10, share prices dont necessarily reflect, the value of a company--it is important to look at, total market capitalization vs. debt, and MGM, has a lot of it. If they had fewer shares outstanding, the price would be higher, and vice versa if they had more outstanding shares.

Can anyone share ideas on how Murren expects to grow Vegas visitation 5-10% just by simply opening CC?

Other commenters have mentioned that MGM comes in and makes all their properties look the same, and I agree 100%... I dont understand why they do this, and it does look like CC will be more of the same.

Posted by Hunter

Yup, just posted it.

When MGM did its CityCenter presentation to the Nevada Lodging & Hospitality Association, it would be no more definitive on the new date for The Harmon other than "late 2010."
MGM's presentation was somewhat upstaged when Gov. Jim Gibbons crashed the party and went around pressing the flesh. (The company had recently made it known that Gibbons could expect no further campaign lucre from MGM coffers; it was switching allegiances to Rory Reid.)

Hopefully the legion of Wynn Worshipers can help me, here. We are coming out for the Podcast a palooza and staying at Encore. Our room is described as "Resort Suite King". This appears to be much lower priced than the same description with "Panoramic View". Looking at google maps, it seems like the view isn't much better from one side to the other. Anyone got any idea what the difference is?

Another lawsuit filed against MGM. I appreciate the Las Vegas Sun's practice of providing links to the court documents. Sometimes, they give interesting insights (or put you to sleep).
http://www.lasvegassun.com/news/2009/sep/15/shareholders-sue-mgm-mirage-directors-over-fallen-/

Here's a couple new links. The first is a behind the scenes look at the new Cirque du Soleil show at City Center, Elvis that opens in December:
http://www.cirquedusoleil.com/en/shows/elvis/show.aspx

The second is to the Mandarin Oriental Las Vegas website. http://www.mandarinoriental.com/lasvegas/

Rooms start at 500 square feet and $595 a night. But go down to $298 a night if you stay more than one night. Good luck with that!

You won't be able to ignore Cosmopolitan if this signage plan was approved by the Zoning Commission. They've requested a variance to the total size of signage and want 11 electronic/animated signs on the building. I assume it was approved.
1, Increase the wall sign area to 29,280 square feet where 23,750 square feet is allowed (a
23.2% increase).
2. Increase the animated sign area including video message units to 19,458 square feet
where 150 square feet is allowed (a 12,872% increase).
3. Allow 11 total animated signs where only 1 animated sign is allowed per street frontage.
4. Increase the average letter height for wall signs to 11.5 feet where 10 feet is the standard
(a 15% increase).
http://agenda.co.clark.nv.us/sirepub/cache/2/auxuyovcfpdsltuqijjyad55/17235509182009064924980.PDF

Posted by mike_ch

Detroit: Looked at that. It was approved by Clark County Zoning Commission as part of a collective vote that also approved seven other things. Nothing was presented and to even hear about it you would have to go up and request it be unbundled from the rest (and the rocks who hang around in the county chambers didn't bother.)

So, is the Zoning Commission the final authority on this? Or is this one of the common acts of an advisory group who lets the item pass through them so the County Commission can take the heat?

The folks at Mandarin Oriental are in for a rude awakening on those room rates.

Posted by mike_ch

Heck if I know. The application isn't actually for building anything but for an exception to certain sign laws, so I doubt we'll get details.

87 days until Aria opens. Surely, someone must have some photos of the casino and public areas. We need to see them!

Posted by mike_ch

Relax, deep breaths. Here, tide yourself over with these pictures of the MGM food court refurb if you haven't already.

Real photos of more interesting things will be coming in time (hours, not days, unless Hunter is really busy.)

"Moderne Generic Moderne"
Mike, I hope you copyrighted that title. It really fits everything MGM does.

Technology and excellent dining. Fascinating:
http://www.wired.com/techbiz/it/magazine/17-10/st_vegasfish

Posted by mike_ch

Yeah, I screwed that up. I meant to not have an 'e' at the end of the first one. MGM's "contemporary clashes with a subtle art deco" thing has invaded all their hotels.

Posted by mike_ch

The photos for StripWalk are up. While it includes a blurry look at the new (?) Lupo, It's very heavy on the Monte Carlo. Includes a look at a Monte Carlo suite as well as the new MC mall, which as far as I can tell is just the old one de-themed and with a new brewery (or at least new marketing for an old brewery). Also Dragon Noodle Co and a shot of MCC/DVino which has now been blocked.

http://photo.ratevegas.com/Other/Strip-Walk-September-2009/9727750_8SAVd

I don't normally mention this, since I should have a column up in the next day or two, but since Detroit seemed so starved for information...

Ahhh. I can breathe again. Thanks for the photos, Mike. Monte Carlo's mall looks very good, imo. It's going to be a great (and busy) area when the tram is operating between Bellagio, Aria and MC. Much more appealing to me than MGM Grand's "modern generic moderne" in their food court.
Photo #14 shows the in-room safe at MC. It looks too small for a laptop which is one of my pet peeves at some Vegas hotels.
I like #33's view of The Mansion. Neat.
The armoire and TV in number 53 sure look old fashioned.

Now MC just needs to freshen their rooms and I can recommend it again as a good mid-tier property. The photos show a spa suite which looks freshened but have always been better than their regular rooms. The MC Pub and mall doesn't look much different from before. I like that Dragon Noodle will have anime costumed waitresses.

What are they building on the roof of the Mandarin's parking garage? It looks like they are walling off an area (the pool or an outdoor venue?), so it gets a little privacy. It looks like an afterthought.

Wynn planning Cotai resort. What does he mean by this statement?
"We have been at the design of Cotai for seven months, and we believe we have a breakaway completely unique idea that's never been done anwyhere before," Mr. Wynn said."
http://online.wsj.com/article/SB125371389956834039.html

Posted by mike_ch

parchedearth: That spa suite had issues. I'll try and detail them, as I spent one and a half days in there and the person whose room it was is handy.

Got my first large mailing from Aria today. Long on style, short on substance. The mailing label included my players club number and the piece ended by urging me to contact my casino marketing executive or executive slot host. Apparently, they still want me back in Vegas after my three year absence.
Las Vegas Weekly has some details on Aria's club, HAZE:
http://www.lasvegasweekly.com/news/2009/sep/23/hazy-details/

Has anyone else noticed there's a CityCenter "peel away" on all the MGM Mirage websites...

Posted by DavidF

Have not seen it mentioned, but the latest exhibition in the Bellagio Gallery of Fine Art is showcasing the artists/architects of City Center.

http://www.bellagio.com/amenities/gallery-of-fine-art.aspx

Don't panic to get there... it does run through April 2010.

Posted by mike_ch

I'm sad to say this, but with all the artist work on display (Maya Lin!) I'm most interested in seeing the early concepts of Aria and if there's somethng in there they never showed the press over the years.