Cosmopolitan of Las Vegas 1 step from gambling license as Nevada board recommends approval

By Oskar Garcia, AP
Thursday, October 7, 2010

Cosmopolitan in Vegas 1 step from gambling license

LAS VEGAS — The $3.9 billion Cosmopolitan of Las Vegas hotel-casino took a key step Thursday toward getting its gambling license after receiving the backing of a state board in Carson City.

The Nevada Gaming Control Board recommended approval for the Deutsche Bank-owned resort.

The Cosmopolitan’s application will go before the Nevada Gaming Commission on Oct. 21 for a determination on the granting of a casino license.

John Unwin, Cosmopolitan’s chief executive, said he looked forward to getting final approval.

“Deutsche Bank and our entire team are very excited about opening the Cosmopolitan of Las Vegas on Dec. 15 and creating 5,000 jobs in Las Vegas,” Unwin said.

The property is located on the Las Vegas Strip between the Bellagio and CityCenter, both owned by MGM Resorts International. The Cosmopolitan will have a 100,000-square-foot casino and 2,995 rooms, a third of which won’t be completed until next year.

Deutsche Bank picked up the foreclosed property in August 2008 for $1 billion after it original developer Ian Bruce Eichner and his company 3700 Associates LLC entered foreclosure.

The 8.7-acre resort is likely to be the last new major casino to open on the Strip during the next few years as tourism and the Vegas economy struggle.

Gambling revenues on the Strip fell 10.6 percent in 2008 and declined more than 9 percent in 2009. Revenue is up 2.2 percent for the first seven months of 2010, according to the Las Vegas Convention and Visitors Authority.

Many experts who follow the gambling industry have said the city doesn’t need more than the 148,500 hotel rooms it currently has. Room rates saw big declines in 2008 and 2009, and occupancy is down just over 2 percent during the first seven months this year.

Competitors worry that more rooms will drive down prices even more and keep hotels in a dogfight for customers.

CityCenter, a joint venture between MGM Resorts and Dubai World, hired 12,000 workers when it opened, but state officials say leisure and hospitality employment in Las Vegas was up only about 100 jobs overall compared with the same time last year.

Cosmopolitan officials told the Nevada Gaming Control Board on Thursday that Deutsche Bank agreed to let a subsidiary operated by four directors make decisions for the casino independent of the bank itself.

The property has used $2.2 billion in borrowed funds from the bank for construction costs and has a $1.6 billion committed credit line left for ongoing development and capital requirements.

The casino would employ about 1,000 people to run nearly 1,500 slots and 83 table games. Another 1,000 employees would be used in the hotel, and 3,000 more would work in its restaurants, bars, nightclub, spa and pool complex.

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