Developers of the $8.5 billion CityCenter on the Las Vegas Strip plan a 30 percent price cut on condos there that people have already agreed to buy, just to help close the deals during the recession.
Company officials announced Monday that CityCenter, co-owned by MGM Mirage and Dubai World, will begin closing on the nearly 2,400 units that have been built in two boutique hotels and two residential towers in January at the reduced prices. More than half of the units are under contract.
The price cut roughly parallels the decline in Nevada's real estate market since the units first went on sale in January 2007.
“We believe that in this economic climate, this price reduction is an appropriate step to take on behalf of our buyers so as to provide them greater flexibility in closing on their residences,” said Bobby Baldwin, chief executive of CityCenter and chief design and construction officer for MGM Mirage.
The price reductions apply to the 227 units at Mandarin Oriental Las Vegas, the 670 units at the Veer Towers and the nearly 1,500 condo units at the 57-story Vdara Condo Hotel. A typical one-bedroom unit of about 800 square feet at the Vdara is now selling for about $674,000, according to an analysis by Bill Lerner of Union Gaming Group.
Other parts of the 67-acre project include a 4,000-room casino-resort, convention space, hotels and a retail mall. The project is to start opening in December.
Tony Dennis, executive vice president of CityCenter's residential division, said officials are scheduling individual meetings with buyers.
"We are committed to making the closing process as efficient and seamless and possible," Dennis said.
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Several casino industry analysts said MGM Mirage and Dubai World, the development arm of the government of Dubai, one of the United Arab Emirates, had to make such a move to close real estate sales in a down market that has been particularly tough in Las Vegas.
Lerner said in late August that the 30 percent price reductions would bring the Vdara's prices in line with those at the Trump International Hotel down the street and the nearby Palms Place condo-hotel 1.5 miles west of the Strip.
Lerner said MGM Mirage might begin pushing those who have committed to buying units at Vdara toward Veer instead.
"This would allow MGM to operate Vdara as a boutique non-gaming hotel," he said.
CityCenter was originally supposed to have 200 more condo and condo-hotel units atop the Harmon, but that plan was scrapped when developers delayed the opening of the 400-room hotel portion to 2010.
