CityCenter Still Causing Headaches for Casino Operator MGM

MGM Mirage faces hundreds of consumers who placed deposits on condos located within the mammoth CityCenter casino and resort who want to change their deals now that the actual estate market has tanked.

After coping with months of economic insecurity directly associated with the CityCenter project, MGM Mirage is now facing a brand new concern from the casino resort. Thousands of condominiums which have been pre-sold are facing buyers who're demanding either drasticaly reduced prices and even defaulting altogether.

According to the Wall Street Journal, 1500 units have seen deposits put on 2440 total condos for a complete of $313 million. However the contracts were written two or more years ago, when Las Vegas real estate was spiraling upward at one of the vital fastest rates within the country.

Now,with the local market in as bad a funk as exists in US property sales, a showdown is coming between the gambling operator and its contracted buyers.

"It will never be possible by any stretch of the imagination to near at the units on the contracted price," said Mark Connot, a partner with Hutchinson & Steffen, an organization representing one of the buyers. Connot told the Journal, "Our position is that they want to adjust the associated fee to market value."

Thus far, MGM has refused to discount or renegotiate any deals already signed. But local real estate agents express concern that, without serious adjustments, many buyers will just abandon their prospective units, leaving thousands of vacancies in an already-overloaded market.

Worse for MGM, a number of the early purchasers are a few of the biggest high-rollers and top level employees of the corporate. As one buyer told the paper, "It's tricky for MGM Mirage. You're making your best customers angry."

Published on July 8, 2009 by A.J.Maldonado

Read More... [Source: MGM Casinos in the News]