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The Las Vegas City Center is Killing Dubai

Given the barrels of ink spilled about the Dubai’s troubles, (click herefor full report). I thought I’d update readers about the Emirate’slargest US asset, which I recently visited.  One can’t help but beoverwhelmed by a sense of history walking by the Las Vegas City Center;without a doubt one of the worst commercial real estate disasters inhuman history. The glitzy, ultra modern, Cesar Pelli designed, 16.8million square foot, 63 acre complex occupies the quarter mile on thecity’s fabled Strip between the Bellagio and the Monte Carlo Hotels,and will unquestionably become one of the Wonders of the World, if itis ever finished. It includes the Mandarin Oriental, Aria, Veer, andHarmon Hotels, offering 4,000 rooms and 2,600 condos. The 57 storyVdara condo-hotel opened just this week, despite the fact that manyoriginal investors have sued to recover their deposits.  They will beadorned by two casinos, a convention center, a new theater for theCirque du Soleil, an gargantuan shopping mall, and parking for 6,900.The finished project will employ 12,000. But strikes and overruns sentcosts soaring to $8.5 billion, and the project is now hopelessly behindschedule. Equity in the mammoth project is now widely believed to beworth zero. I saw a total of one worker in a cherry picker working onthe project with a screwdriver. The other guy going up in an elevatorturned out to be a lender contemplating a jump off the top. KirkKerkorian wanted to build the ultimate Sin City destination resort whenhis MGM-Mirage partnered with Dubai World. The relationship has soured,with Dubai World filing a suit against its partner for negligence andmismanagement, which it later withdrew. Who is going to stay in allthese rooms? Those who financed trips to Vegas with home equity loansor subprime credit cards definitely are not coming back. If the projectgrinds to a halt, it will leave a gigantic eyesore at the heart of thecity’s tourist area, becoming a monument to excess in a city ofexcesses. Unfortunately, what happens in Vegas doesn’t always stay inVegas, as a financial collapse would send shivers through the industryglobally.