Reid credited with saving CityCenter after economy collapsed during recession

Driven by foreclosures, job losses and abandoned real estate projects, Las Vegas was a dark place during the Great Recession.

At the time, the multi-billion dollar CityCenter project on the Strip was also in danger of failing and dragging its developer MGM Mirage with it.

Harry Reid, however, used his influence to help keep the project afloat.

Then-Senate Majority Leader Reid and then-other US Senator from Nevada John Ensign called on CEOs and other senior bank officials and asked them to consider ready for CityCenter, reported the Las Vegas Sun in March 2009.

At the time, a spokesperson for Reid said the senator “was asked for help, and he helped,” the newspaper reported.

“Senator Reid called the banks and asked them to give this project a serious blow,” said the spokesperson, who also told the Review-Journal that Reid had “simply asked the banks to take a close look at MGM’s Project CityCenter to ensure that sound banking analysis guides credit decisions, and not irrational recklessness about what is sometimes described as a controversial industry.”

“Devastating on many fronts”

Reid, the most powerful Nevadan ever elected to federal office and the longest-serving United States Senator in state history, died Tuesday at the age of 82 after a four-year battle with pancreatic cancer.

R&R Partners CEO Billy Vassiliadis, whose company created the Las Vegas “What Happens Here, Stays Here” ad campaign, said a few years ago that Ensign’s efforts had likely helped Downtown, but that probably meant more than Reid was involved.

The $ 8.5 billion resort includes the Aria Hotel and Casino; Vdara, a hotel without gambling; the former Mandarin Oriental (today Waldorf Astoria), a skyscraper with hotel and condo units; Luxury Shopping Center Boutiques in Crystals; and Veer Towers, two 37-story glass condo buildings that by design tilt at 5-degree angles.

If construction of the CityCenter had been halted, it “would have been devastating on several fronts,” Vassiliadis said.

“It would have taken a long time to recover from something like this,” 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 has avoided collapse under the weight of the financial crisis from 2008 “.

“Words cannot begin to describe the monumental impact Senator Harry Reid has had on Nevada, our country and our industry,” Hornbuckle said.

Reid “saved downtown”

MGM unveiled plans for Project CityCenter, as it was then called, in 2004, claiming it would be an “urban metropolis”.

In one Press release In announcing the project, Terry Lanni, then MGM’s boss, referred to the 1905 land auction that kicked off Las Vegas, the construction of the Hoover Dam, and other landmark moments in local history.

In the summer of 2007, MGM announcement that state-owned Dubai World was pumping $ 2.7 billion into CityCenter for a 50% stake and would buy up to $ 2.4 billion in MGM shares.

Soon enough, however, the Las Vegas real estate bubble burst, southern Nevada was zero point for America’s financial wreckage, and projects across the valley were derailed.

MGM landed a big cash injection after the economy began to plunge, making a deal in late 2008 to sell Treasure Island for $ 775 million. But the cost of CityCenter had climbed, the construction flaws on the unfinished Harmon Hotel sparked a massive legal battle involving contractors and developers, and the owners of CityCenter fought against each other.

Dubai World sued MGM over the project and reportedly stopped investing money in it. The project teetered on bankruptcy and, as the Review-Journal reported, there was speculation that MGM Mirage herself could claim Chapter 11.

In April 2009, MGM announcement it had provided $ 70 million to cover the costs of building the CityCenter, including $ 35 million that “should have been funded” by Dubai.

Later in the month – and sometime after the intervention of Senators from Nevada – MGM and Dubai World Okay to fully fund and complete the project.

“I believed that if we couldn’t save CityCenter, we couldn’t save MGM Mirage,” said Jim Murren, then MGM’s general manager, in December 2009 item in the Review-Journal.

Reid is credited in Las Vegas for helping to keep the massive project afloat. Murren, for his part, even appeared in TV campaign ads for Reid, praising how the senator had “saved CityCenter”.

Contact Eli Segall at [email protected] or 702-383-0342. To follow @eli_segall on Twitter.

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