The Cosmopolitan is made up of the two closest buildings under construction. The buildings in the rear are all part of the MGM CityCenter project. This picture was taken in June

Since that time rumors and speculation have abounded - complete with a Wall Street Journal article stating that Starwood Hotels & The Related Companies are purchasing an interest in it so that it can be completed, yet re-branded as the W Las Vegas, and also - as rumor has it - St Regis Las Vegas (two different brands in one building). Global Hyatt was also supposedly ready to take over the project but they could not come up with the appropriate financing required to do the deal.

Since May nothing has been said about the project - but on August 7th, Deutsche Bank officially foreclosed on the property - completely removing Bruce Eichner from the picture, while still continuing to finish construction.

For all those who have deposits on units there (and a lot of you have contacted me directly to see what the status is) all I can say is this: Construction is continuing, so I do not think that your deposits are in danger of being lost. Of course, please please please read your agreement or contract that you signed which should give you information as to what you can do/expect, or talk it over with a lawyer.

Here is a picture of the Cosmopolitan taken two days after the foreclosure (8/9/08) - showing construction still proceeding as normal

Why is Deutsche bank proceeding with construction? They are so far into the construction process that it would make more sense to finish the project rather than let it sit and raise the prospect that Deutsche Bank may lose more money than they already have put in by it just deteriorating. DB has a much better opportunity to get their money back by finishing the project and seeing it to its completion. Remember - DB isn't the company that is actually building the place, and nor was Bruce Eichner's company building it - a third party construction firm (Perini Construction) is actually building the project. So don't be alarmed and think that a bunch of bankers are now pouring concrete! Also - Perini is also the firm overseeing all construction at MGM's CityCenter.

Unlike a bankruptcy, a foreclosure does not mean that owner is instantly absolved from all the debts that is incurred - it means that the bank takes over the property and runs it. Typically banks don't want to run the property - and will instead look to sell it off. Having that many deposits (aka: future residents) is a very valuable negotiating point for the bank trying to sell the property.

It's been suggest that there are only 4 firms interested in the property: Starwood Hotels (probably with The Related Companies), MGMMirage, Hyatt and Marriott.

I think all four firms would be able to fit the Cosmopolitan into their roster easily - Marriott as an Edition, Starwood as the planned W Las Vegas/St Regis, Hyatt because it's was the original hotel operator of the Cosmopolitan, and MGMMirage because CityCenter/Caesars surrounds the Cosmopolitan location, in fact - I think most people think that the Cosmopolitan is part of CityCenter.

I think that Starwood or MGM is the best bet - MGM because of where the Cosmopolitan is located - right smack in the middle of a lot of the MGM Strip Property, and Starwood because apparently they were so close to consummating a deal earlier in the year..

I'll keep everyone posted on anything that i hear!

andrew@alconic-inc.com

MGM Mirage's net income tumbled 69% amid year-earlier gains and a drop in revenue as guests continued to visit the casino operator's resorts in high numbers, but at lower room rates and with lower spending. Casino revenue decreased 4%.

read more | digg story

-- Jim Murren, president of MGM Mirage, remains relatively sanguine and thinks that the market reaction has been overblown.
"We go through cycles in hospitality, we go through cycles in Las Vegas," he recently told MarketWatch. "There seems to be a kind of piling-on effect right now with folks worried about any of myriad issues. We think we have a handle on this. We have been through this before."
He pointed out that the company is still running occupancy in the 90% range.
"Sure, we have had to lower rates to do that but we are filling up these rooms," Murren said. "And we are generating strong profits. Are we making as much money as last year? No. But we are making more money than we did in 2005 and 2006, and we felt pretty good about ourselves back then." -- end quote.
MGM is trading at multi-year lows, and given the great properties owned by MGM the stock is sure to be a sound investment in my opinion.  Any price below $30 a share would be good as MGM has been a buy out target with a deal $87 a share falling apart last year.  As long as the world doesn't spin out of control MGM should do well.

  Challenges do present themselves in the entertainment, and gaming industry. Much of the gambling industry is facing declining revenues going forward with revenues down 15% on average across the board. Aaverage revenue per guest declines are expected to continue in the face of rising input costs.

Entertainment purposes,

by David Farside

E-mail: farsidian2001@yahoo.com

Website: www.thefarsidechronicles.com

It’s politics as usual in Carson City. First, Republican Governor Gibbons called for a special session of the legislature on Monday to find ways to make up for our budgetary shortfall. Now he has changed his mind and is threatening to move it to Friday. It seems he changes his mind about politics as often as he does about women. He and the Republican senators who control this state should have solved the problems in the regular session.

The soon to be divorced governor should have seen the writing on the wall last year. Now he will cost the taxpayers another $300,000 because of his inability to get things done and his stubborn policy of no new taxes.

The need for the special session has been questioned by state treasurer Kate Marshall. She sent letters to state leaders and Gibbons stating the state has enough cash flow, over $200 million, to last until the next session opens in 2009.

The projected 2007-2009 budget has more than a $914 million short fall. To their credit, Gibbons and the legislature have found almost $914 million. But estimates show the state needs to cut between $90 million and $260 million to meet their budget. The shortage is due to a drop in sales tax and gaming tax.

Marshal has recommended several cost saving options to the state: freezing overtime for state workers would save about $18 million. Discontinuing out of state travel would save another $ 700,000; and another $6 million could be saved annually by limiting in-state travel of state workers.

Some new sources of revenue might be considered. MGM Mirage CEO Terry Lanni is in favor of raising the business payroll tax and possibly the room tax. But, he didn’t mention anything about raising the gaming tax. If the 0.6 percent payroll tax was increased to 1.3 percent it would generate another $246 million annually on the back of small business.

The room tax might be a better option for the gamers. The Nevada Resort Association might actually support a temporary increase in the room tax. It would be good strategy on their part. Since the gamers snookered the teachers into believing they could get a room tax in the future, they could argue against any further milking of their cash cow.

Speaking of teachers, Sen. Bill Raggio wants to save $130 million by deferring a 4 percent cost of living increases to state workers. Most state workers are teachers and have a signed agreement with the state guaranteeing their salary increase. This idea of Raggio’s would certainly end up in court.

It always bemuses me how these so-called friends of education can’t keep their word to education. If anyone deserves a raise it is teachers.

Every day they have to contend with school principles, policy of the school district, parents, problem children and politicians. We entrust our children to them and expect them to not only teach the academics, but to guide our kid’s in the direction of moral values. But, they are always the first ones on the senate’s fiscal chopping block.

We know of one tax that will never be increased - the gaming tax.

Compared to other states Nevada’s gamers are getting off easy when it comes to paying taxes.

The gaming tax rate in Louisiana is proof that an increase in Nevada’s gaming tax will not “ destroy” the state’s gaming industry. Currently, Louisiana receives 21.5% of the casinos gross revenue. Before the legalization date of July 1991, Nevada based casinos wanting to do business in New Orleans were willing to pay an even higher percentage just to get their foot in the door of a new market.

These are the same corporations enjoying a 6.75% maximum tax on gross revenue here in Nevada. However, the Nevada revised statues provide for additional fees and levies by counties, municipalities and the state of up to 1 percent.

The state of Illinois imposes a 15% to 50% graduated tax on gaming. They also charge a $2-3 per patron admission tax.

Last year the racetrack casinos in New York had a gross of $828 million. More than half of that, $449 million, was distributed to education

Nevada gaming revenue in 2007 was $12,849 billion. By increasing the gaming tax by even a half percent the state would receive another $750 million. As long as we have the old guard republicans in the senate any increase of gaming tax is not even a remote possibility. I wonder why?

Between the political posturing and rhetoric debate one comment did make sense. Sen. Bob Beers said he will introduce a bill changing the legislative sessions to once a year instead of every two years. And that is a good idea. He points out it is unreasonable to project needed revenues 26 months in advance.

That will never happen. Organized chaos is the senate leaders best friend. They always use the excuse they don’t have the time to hear all the issues. Usually, a week before the close of the session they tack on their favorite pet projects to an obscure bill that will pass easy without any debate.

I don’t know what they will decide about the budget. But this year’s special session demonstrates that Sen. Beers is right. It is time we have annual legislative session.

In recent days, many have asked for my take on Marina Grande.  The Court took the time to write a long and detailed opinion which in many ways is self-explanatory, so it is definitely worth reading the opinion in full.  In my view, there two main takeaway points, one "small picture" point and one "big picture" point.

The Small Picture:  The Court held that a 2007 law passed by the Florida legislature had the effect of eliminating a buyer's right to cancel a purchase contract based on amendments to the condo's operating budget -- i.e., rising assessments -- which are based on "matters beyond the developer's control."  The substantive interpretation of the 2007 law is not surprising to me; what left me scratching my head, however, was that the Court applied the law retroactively to a purchase contract that was signed well before the law was passed.  Florida law has a very clear and large presumption against the retrospective operation of a statute.  See State Farm Mutual Auto Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995).  Not only that, but even if a legislature passes a law with intended retrospective effect, it cannot be applied retroactively if to do so would impair rights under an existing contract, as such application would violate both the Florida and U.S. Constitutions.  See Fla. Dep't of Transp. v. Chadbourne, 382 So. 2d 293 (Fla. 1980).  Unquestionably, removing a buyer's statutory right to rescind a contract is an impairment of the buyer's contractual rights, and the Court had nothing to say on this issue.

Even given the ruling, however, it is important to recognize that the Court has not entirely foreclosed the possibility for rising assessments to serve as a valid basis to cancel a condo contract.  Instead, the focus will now be on whether such increases were "beyond the developer's control."  In many instances, this will not be a black or white determination, and if anything, the Marina Grande opinion has opened up a new line of factual issues for contested litigation in condo contract cases.

The Big Picture:   In the second part of its opinion, the Court actually reversed the trial court's reasoning, although it reached the same result as the trial court in denying the buyers' claims to recover their deposit monies.  Essentially, the Court disagreed with the trial court's view that the individual buyer's specific situation or financial condition should be determinative of whether the buyer may cancel the contract and recover the deposits.  Rather, as the Court stated, "an objective test is appropriate . . . would a reasonable buyer under the purchase agreement find the change to be so significant that it would alter the buyer's decision to enter into the contract?"  Here, the Court got it right and properly applied the Florida condo statute as it has been construed in other cases, and averted the disastrous result of turning condo contract into "divorce cases," or battles over each buyer's subjective situation.

This result is good for both buyers and developers in the long run, because it will lend predictability to the interpretation and judicial enforcement of condo contracts.  When you think about it, the objective test may actually be more beneficial to buyers in the short run with respect to the rash of condo cases being litigated in courts across Florida.  For instance, with respect to changes to a development's common elements -- for example, a decrease in the size of the swimming pool or the elimination of the gym -- the Marina Grande decision clarifies that there is no need to inquire whether an individual buyer would have gotten any use out of the common element in question, only whether a "reasonable buyer" would have cared about the change before entering into the contract.  Not only is this the right way to treat condo buyers -- given that collective ownership of all of the common elements is the very defining feature of condo ownership -- but it accords with longstanding treatment of condo buyers in Florida courts.

By Jared H. Beck, Esq.

This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the author.

Mr. Beck has a law degree from Harvard Law School, and practices law in the courts of South Florida. His law firm, Beck & Lee Business Trial Lawyers in Miami, is dedicated to the practice of business and real estate litigation. A significant portion of Mr. Beck's practice is devoted to issues arising under condominium and other real estate purchase agreements. He can be reached at 305-789-0072 or jared@beckandlee.com

Borgata and Caesars Set Attendance Records During the WSOP

Both Caesars and the Borgata drew record numbers of runners in recent deepstack tournaments despite competing against the world’s biggest tournament series in the WSOP. According to Pokernews.com’s Tina Bergstrom, 710 players showed up at Caesars to play in a $330 + $10 tournament last Friday’s tournament, giving the poker room its largest field ever and Borgata experienced record-breaking numbers with its $5,000 Summer Poker Open championship event. The Atlantic City casino drew 345 runners on Sunday, topping last year’s figure of 337 and generated a $1.7 million prize pool and a $500,200 first-place prize.

Although many speculate that the poker industry may be weakening due to the economy, it seems that there are still plenty of players willing to put up hard-earned cash to take their shot at a title and the first-place cash that comes with it.

Get In Me Belly

I first met David Benyamine after I got done interviewing his fiancé Erica Schoenberg. I wasn’t exactly sure what to make of the guy as he was very soft-spoken and seemed kind of shy. I had heard about his reputation as a player and just figured that he was one of those brilliant guys that just didn’t do all that well socially.

After the meeting with him, I began checking into his background for an article I wanted to do for CardPlayer. I had heard the legend of David’s exploits at Bellagio’s big game and I was dying to see what made him tick. Unfortunately, I didn’t get assigned to the article which frustrated the shit out of me because I really wanted to get a chance to go one on one with David and find out what really goes on in his head.

You’re probably asking why I’m telling you this. It is because Benyamine just took down first-place in the WSOP $10,000 Omaha High-Low Split World Championship. Benyamine’s win further cemented the Frenchman’s legacy as one of the game’s top players and adds to his already impressive 2008 WSOP stats. He is finally off of the dreaded, “best player to never win a bracelet list.” The fact that Benyamine won a bracelet should surprise no one. The guy just won $1.5 million in a month’s time playing cash games on Full Tilt Poker and he’s always been considered on of the game’s better tournament players.

Is MGM Gambling on a New Future?

According to a recent article in the Wall Street Journal, the MGM Mirage recently announced a deal that has it developing and operating a gambling-free luxury-hotel complex in Tianjin, China. It appears that MGM Mirage is looking to follow in the foot steps of several major hotel chains that license their brands to various luxury-hotels. An  example of this new tact from MGM comes from the recent opening of the MGM Grand at Foxwoods. The Mashantucket Pequot Tribal Nation of Connecticut currently has a deal where it pays MGM Mirage a licensing and consulting fee for use of the MGM Grand name.