Foreclosures Make Future Of New Las Vegas Project Bleak
It is a chain reaction. Foreclosures are making the economy look bad while the latter is casting a doubt on the completion of multibillion dollar casino plans in Las Vegas. It is more difficult nowadays to get credit for financing new schemes. The Cosmopolitan Resort and Casino as well as the Plaza Casino and Hotel are in troubled waters. There is a strong opinion that these projects may never be completed.
It has been reported that Bruce Eichner’s firm, 3700 Associates LLC, which owns The Cosmopolitan, is about to be foreclosed upon by its main lender, the Deutsche Bank. Eichner has commented that the bank is working with him to find new avenues through which to finance his project without losing speed. But it seems that the new financiers are not easy to find. In January, a $760 dollar loan default was declared by the bank. It has also said that it will go ahead with foreclosure proceedings, although no final date has been announced. Eichner too was silent about having or not having received a foreclosure notice. The company involved with the construction, Perini Building Corporation, has said that would not stop its ongoing work even though an agreement was reached with Deutsche Bank. The cost of the casino, which is next to the Bellagio, would climb up to $3 billion.
Plaza officials are scheduled to appear before the Clark County Commission in order to reply to reports that have been published saying that the project will be kept on hold. The Plaza is being built after the famous Plaza Hotel of New York. The Elad Group, comprising of many Israeli investors, are the owners of the planned Plaza Casino and Hotel. Reports have been published in Israel saying that, because of the credit crunch in the US, the project might have to be kept in abeyance. The Elad group, however, insists that the news is just an incorrect rumor and that the project will be completed on time. The overall cost of the project may go as high as $6 billion.
At one time, it was thought that no recession or recession-like situation could touch establishments like casinos. But the enormities of these types of investments have made them vulnerable to many outside forces, like recessions. The gambling must be equally on a grand scale to make it run. Any old client will not do – they must be jumbo corporations with tons of money to spend. Their likes must fill the rooms’ everyday to keep the joint oiled and running. Otherwise, there will be risky leaks.
