Betting the spread

LAS VEGAS – Sin City is pinning its biggest bet ever – $8.5 billion – on a 67-acre, six-tower complex of striking hotels, gourmet restaurants, swank shops and a single casino that starts opening today in the heart of the Las Vegas Strip.

Many watching the high-stakes roll of the dice shudder at the thought that nearly 5,900 rooms in three hotels will be awaiting guests when CityCenter’s crown jewel – the 4,004-room Aria Resort & Casino – opens Dec. 16. That will increase Las Vegas’ already saturated inventory by more than 4 percent at a time when fewer visitors are coming and room prices have fallen 25 percent from last year.

CityCenter’s debut might pull rates even lower, but state leaders hope the complex leads Nevada out of two years of economic misery that has hit the state with record unemployment, foreclosures and bankruptcies.

“We’re in a 12-round fight. The first six rounds, you guys got beat up,” Tony Alamo of the Nevada Gaming Commission told CityCenter owners MGM Mirage and Dubai World when Aria’s license was approved.

“We’re putting all our eggs in the ‘grow-the-market’ basket. I would be lying to you if I wasn’t concerned – that’s a reality,” he said. “This is not just the company, it’s the state.”

When The Mirage opened in 1989, it launched two decades of expansion that more than doubled the number of rooms in Las Vegas to some 141,000 today. A record 39.2 million visitors came to Las Vegas in 2007, but that dropped to 37.5 million last year as the recession kept many people away.

Las Vegas’ rapid growth came to a halt, crippling casinos and construction, the state’s two largest industries. Nevada’s unemployment hit a record 13.3 percent in September.

According to the Las Vegas Convention and Visitors Authority, most of about 40 projects that have been proposed or started haven’t determined completion dates.

Construction started on three projects that would add 9,390 rooms to the Strip, but Boyd Gaming’s $4.8 billion Echelon, the Fontainebleau Las Vegas and an addition at Caesars Palace are all on hold. The $3.9 billion Cosmopolitan casino-resort is scheduled to open next to CityCenter in September 2010, but it’s now owned by Deutsche Bank after the developers fell into foreclosure.

Phil Ruffin, who owns the Treasure Island casino-resort about 1 1/2 miles north of CityCenter, said new hotels have historically helped tourism but CityCenter is opening into unprecedented economic circumstances.

“It’s going to be bloody out there,” the Kansas billionaire told the Associated Press.

Including condominiums, CityCenter will have nearly 6,800 units open early next year, with 400 more hotel rooms planned.

While marketed to high-end customers, rates for a room at CityCenter on Dec. 20 start at $129 at the boutique Vdara, $149 at anchor resort Aria and $345 at the luxury Mandarin Oriental.

CityCenter has had anything but a smooth trip to completion. In the five years from the drawing board to its final touches, its funding nearly lapsed, MGM Mirage and Dubai World fought in court, and six construction workers died.

Ruffin bought Treasure Island for $775 million and took over in March, giving MGM Mirage a cash infusion.

MGM Mirage and Dubai World each have billions in debt, and Dubai World last week asked creditors for a six-month break from payments on the $60 billion it owes them. MGM Mirage officials say the standstill won’t affect CityCenter; the partners agreed with banks in April to fully fund and finish the project. MGM Mirage spokesman Alan Feldman said the agreement includes cross-default language that protects the company against any issues at Dubai World.

The result is 18 million square feet in six soaring glass towers and a retail promenade. The modern design evokes the feel of a major city’s bustling downtown.

Aria offers 15 places to dine. The rest of the complex has 12 restaurants, including a classic French cuisine by Pierre Gagnaire, a Michelin three-star chef opening his first U.S. restaurant.

There are also 670 condominium-only units opening in January.

There are 15 fine art installations on site, including a Henry Moore sculpture set in a quiet alcove. Maya Lin used recycled silver to build a scale model of the Colorado River over Aria’s registration desk.

CityCenter’s owners now find themselves fighting for returns on a resort valued at roughly $4.88 billion as of Sept. 30, less than 60 percent of its construction cost, according to estimates MGM Mirage released last month after it reduced CityCenter’s condo prices. The company told regulators Nov. 13 that 1,443 of the 2,440 condo and condo-hotel units were under contract.