Las Vegas NowMGM Mirage Makes Required Payment For CityCenter

MGM Mirage Makes Required Payment For CityCenter

MGM Mirage averted disaster Friday when it made a $200 million loan payment on Project CityCenter. MGM's partner in the project, a subsidiary of Dubai World, did not come up with its half of the payment so MGM paid it for them.

This does not mean the project is out of the woods or will be completed on time. There are still a number of financial challenges between now and December, when the project is scheduled to open.

MGM Mirage had to get a waiver from lenders to allow it to make the payment for Dubai World. If the company did not make the payment, CityCenter would have been headed toward bankruptcy and possibly delays.

CityCenter will rival any resort in the world when it opens. The economic downturn and world-wide credit crunch have hit Las Vegas, and MGM Mirage, particularly hard according to economist John Restrepo, "We are in unknown territory right now. We don't know what this all means. Both partners, particularly MGM Mirage, wants to move this project forward."

Restrepo has been studying the economy for the past 30 years and 20 of those years in Las Vegas. He says the 12,000 jobs created by CityCenter will have a multiplier effect on the economy, creating even more jobs in support industries, "A project like this is very important to the community because it provides jobs, it provides economic activity, it provides sales taxes, property taxes."

In a letter to MGM Mirage employees, CEO and Chairman Jim Murren says his company remains deeply committed to the, "completion of CityCenter and fulfillment of the economic and social promise that it holds for the future of our company, our Las Vegas community and our state."

The letter adds that neither MGM Mirage nor CityCenter filed for bankruptcy.

"It's the jewel in their crown. They don't want to stop it. They don't want to put a big chain link fence around it. They want to move this forward," said Restrepo.

After making the payment, MGM Mirage and Dubai World still must come up with $800 million more, $200 million a month, to have access to a credit line that could ease the resort's financial troubles. That credit line is $1.8 billion.

The Southern Nevada Building and Construction Trades Council released a statement saying how excited they were to hear MGM Mirage will keep construction on CityCenter on schedule, while keeping 8,500 construction workers out of the unemployment line.