Foreclosure is normally not a topic for amusement, but the Las Vegas real estate scene is like a brand new Hasbro game show, Monopoly.TV.
The developer of the $3 billion Cosmopolitan Resort & Casino says its lender, Deutsche Bank, filed a notice of foreclosure on the property for a construction loan of $760 million that just matured.
Developer and owner Ian Bruce Eichner says in a statement that his company is working with Deutsche Bank and Merrill Lynch to find new investors.
Eichner tells The Associated Press in the statement that, “This action by our lender comes as no surprise.”
He blames challenges in the real estate and capital markets for difficulty in raising capital for the project, which is now under construction.
The project: The Cosmopolitan is being built to wrap around the old Jockey Club time-share on the strip. The owners were able to make the deal by revitalizing the Jockey Club towers and connecting them with a new parking garage. It’s an interesting plan, because the only artifact of humankind likely to outlast the cockroaches is fractional-ownership real estate.
The Cosmopolitan isn’t the first local hotel-casino project to run into problems because of the current economic climate.
“We have seen selected projects fail to move forward that had previously announced plans with the current credit crunch and the tightened lending requirements,” Las Vegas-based Applied Analysis principal Brian Gordon said. “Certainly, that has impacted many projects throughout the Las Vegas Valley, including resort and nonresort projects.”
Tight credit markets have been cited as the reason for postponing planned resort developments at the Tropicana, the Silverton and Southern Highlands Resort.
However, unlike the Cosmopolitan, which broke ground in October 2005, none of those projects had begun construction.
The most famous example of a stalled Strip project was the Stratosphere, which was conceived by casino operator Bob Stupak in the early 1990s.
Grand Casinos stepped in and finished the 1,149-foot tower hotel-casino project after Stupak ran into financial trouble that had stopped construction. Construction work was halted again in the mid-1990s, this time on a hotel room section, when the company went bankrupt. The development was eventually Read more


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