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| Friday, November 20, 2009 |
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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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March 18, 2008 12:51 PM ET
In a move that does not auger well for the construction industry, lead lender Deutsche Bank is proceeding with foreclosure proceedings against the developer of a high-profile casino in Las Vegas. The project, the $3.9 billion Cosmopolitan Resort and Casino, is going up on an 8.5-acre site on the Vegas Strip, between MGM Mirage’s Bellagio Resort and Casino and CityCenter, an MGM project now under construction. But the Cosmopolitan’s general contractor, Perini, said in a press release yesterday that it has been informed by Deutsche Bank that the bank has begun the foreclosure process on 3700 Associates, the developer of the Cosmopolitan. Deutsche Bank holds a $760 million senior loan on the project. 3700 Associates is thought to be continuing its negotiations with two other original lenders on the project, Global Hyatt and New York-based Marathon Asset Management. “The parties are actively engaged in discussions regarding a recapitalization of the condominium-hotel casino project,” Perini said. In the meantime, Deutsche Bank continues to pay Perini for its work on a monthly basis, as per a previous agreement. “As a result, the company’s work at the Cosmopolitan continues on schedule,” said Framingham, Mass.-based Perini. The project is scheduled to be completed by the end of 2009. The Cosmopolitan’s developer, 3700 Associates, said in January that it had defaulted on a construction loan, but was seeking refinancing. Those efforts by the firm and its CEO, Ian Bruce Eichner, apparently failed as a result of the current environment of tight credit and tougher loan underwriting standards. Bob Band, CEO of Perini, said in an interview that “the way it stands is, they advised [developer] Bruce Eichner that they need more equity and he’s been trying to find it and hasn’t been successful. But he’s been in discussions with Global Hyatt and Marathon and they’re not quite finished, and I think this [foreclosure] might be a way for [Deutsche] to apply some pressure. “But they have no intentions of stopping the project,” Mr. Band said. “We’re convinced it will be completed, it’s just a matter of getting the equity investment sorted out.” He said he thinks Las Vegas will continue to grow, despite the weakening economy. “In fact, there are numerous new projects that are just over the horizon.” Plans for those projects, especially those being financed by local companies that get cash flow from their other casinos and hotels, are likely to stay on track, Mr. Band said. “It could be different for somebody coming in for the first time and needing bank financing. That would take a while.” A Deutsche Bank spokesman declined comment today. A spokesman for Marathon said in a statement today that “Deutsche Bank informed Marathon that they intend to continue to pursue their remedies and proceed with a foreclosure on the property. Notwithstanding these proceedings, Marathon and Deutsche Bank continue to be actively engaged in discussions regarding a recapitalization of the project.” Perini broke ground on the Cosmopolitan in October 2005. The 4-million-square-foot facility features two glass towers housing about 2,200 hotel rooms and condo hotel rooms. All the condo units in the first tower are sold out.
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