X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-Deutsche Bank AG said Tuesday it took a $653-million charge against earnings in the first quarter to reflect a bad bet in Las Vegas. The write-off reflects the declining value of Cosmopolitan Resort and Casino, its $4-billion resort project under construction on the Las Vegas Strip. The project went vertical in April 2007 and is now scheduled to open late next year, one year later than originally planned.

The German bank, initially only the lender on the project, began foreclosure proceedings in January 2008 after Cosmo Senior Borrower LLC, the Ian Bruce Eichner entity that was the original owner and developer of the property, defaulted on its $760-million construction loan that it could not refinance amid the credit crunch.

In September, Nevada Property One LLC, an affiliate of Deutsche Bank, bought the resort out of foreclosure for about $1.44 billion, inked a “guaranteed maximum price contract” with Perini Corp. to complete construction and tapped Related Cos. to oversee the work. Perini has been working on the project from the beginning. In January, the bank won a two-year extension of its waiver from standard parking requirements for the $3.9-billion development.

The development site is a small lot between the Bellagio and the under-construction CityCenter development, both of which are owned by MGM Mirage. The project includes two high-rise condo-hotel towers with approximately 2,000 condo-hotel units and 1,000 straight hotel rooms, 641,850 square feet of back-of-house area and 522,934 square feet of public areas above subterranean parking. Approximately 1,800 units are said to be under contract.

The parking standards waiver, a 32% reduction in the required parking from 5,029 spaces to 3,420 spaces, was approved in December 2005. The commercial subdivision was re-approved in October 2008, after Deutsche Bank bought the property out of foreclosure.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.