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The City Within Sin City

The new visionary CityCenter may be the sparkling future of Las Vegas
Michael Kaplan
From the Print Edition:
Chris Noth, May/June 2010

(continued from page 2)

Designed by Peter Marino-whose residential client list includes the likes of Giorgio Armani, Gianni Agnelli and Ron Perelman-the top-tier units, on floors 57 through 59, come off as hideaways that are fit for billionaires. "We designed our penthouses to be a property within the property," says McBeath who's personally gambled enough with his own money to know what high rollers desire. "You have your own arrival and check-in. Then, when you're ready to play, you come down the hotel elevator, onto the casino level. Baccarat is to your right and Carta Privada [for other high-limit table games] is to your left."

Standard accommodations aren't too shabby either, all masculine with leather detailing and earth-toned color schemes. Sticking with the mandate to be different, the rooms are loaded with enough technology to remind you that Aria is the newest place in town. A bedside control panel allows you to black out the room from under your covers but leave the TV playing, set to shut once you doze off. Come morning, the room can be programmed for a gradual wake-up via a slowly increased incursion of light and sound. The sleek, flat-panel television is outfitted with takeoff information from McCarran International, so you can gauge if your flight is delayed and act accordingly. Get a room with an off-Strip view and you'll be looking west to a mountainous panorama, which makes for a nice respite from all the typical glitz of Las Vegas.

Same with the art that you encounter when strolling around CityCenter. These days, with a museum at Bellagio, real Picassos in the restaurant named for the artist and Venetian's scuttled attempt to bring the Guggenheim to Vegas, nobody is really shocked that hoteliers have the taste and money to get their hands on quality works. That said, CityCenter kicks art accumulation, and the placement of it, up to a new level. There are around 15 pieces, purchased with a budget of $40 million, scattered around the inside and outside of CityCenter.

An enormous Julian Schnabel dominates one wall near the convention center. Maya Lin, who's most famous for the Vietnam Veterans Memorial in Washington, DC, created a spurty looking piece, made from reclaimed silver and designed to match the shape of the Colorado River, that hangs above the front desk of Aria. When a Henry Moore sculpture was put into place outdoors, the 50,000-pound piece proved so heavy that the ground it stands on had to be enforced. My personal favorites are Nancy Rubins's enormous sculpture composed of full-size boats and kayaks near the front door of Vdara and Jenny Holzer's ever-changing text-driven installation that adorns north valet parking. Taking in wall-size "truisms" such as "Sometimes you have a luxury of time before something bad happens" (which adopts special meaning amid the blackjack and craps tables), brings an intellectual and aesthetic experience to the simple act of waiting for your car.

Less likely to be noticed by guests is the green initiative that is integral to the construction and operation of CityCenter. Each building there is LEED gold certified, which means that they meet high levels of sustainability and environmentalism. Overall, the facility uses less water, burns less electricity and cools more efficiently than similar properties do. Showiest of all is CityCenter's armada of limos, which run on compressed natural gas. While Baldwin recounts "the pain" of watching $90,000 stretches being crash-tested (never mind that Baldwin's been known to win and lose that much on a single hole of golf), he also makes it clear that, besides being the right thing to do in the eyes of society, green efforts also pay off economically. "There are companies that won't give you convention business unless you have a sustainability plan," confirms McBeath. "Plus we save a lot of money operationally by cooling air from the ground up [instead of from the ceiling down] and generating some of our own power."

When all is said and done, the fact that CityCenter-complete with its state-of-the-art spa and bumping nightclubs-even made it to the finish line, considering its timing and economic challenges, is something that the folks at MGM Mirage should be proud of. Bobby Baldwin is quick to point out similarly ambitious undertakings- Echelon and Fountainbleu, most glaringly-that didn't come close to completion. They remain stillborn construction sites that serve as grim reminders of how quickly Vegas's economic realities whiplashed over the last few years.

Speaking to me in early March of 2010, Baldwin expresses a belief that by the time you read this, customers will be enjoying the warm weather and experiencing the more metropolitan, stroll-worthy aspects of CityCenter. He envisions people taking in the outdoor art collection, walking from property to property, gambling in Aria, lunching at the Pan-Asian restaurant Silk Road inside Vdara, enjoying afternoon tea on the elegant 23rd floor of Mandarin Oriental and shopping at Crystals. In the best-case scenario, they'll be toting brown, black and robin's egg blue bags from Louis Vuitton, Roberto Cavalli and Tiffany-before settling on a place for dinner, gambling it up in the casino and checking out Aria's Viva ELVIS show or dancing in its nightclub Haze.

That, of course, is the romantic view of success: customers enjoying and spending. Baldwin, McBeath and Murren all know that the more objective metric will be evident on P&L statements and echoed in Wall Street's belief in CityCenter. It's a belief that will ultimately cause MGM Mirage's stock prices to rise or fall. An early vote of confidence came in April 2009, when the cash-strapped company managed to raise $1.2 billion in the equity market. Considering that 2009 stood as a year in which MGM Mirage had operating losses, Murren characterizes those who bought in as having "bet on black." The stock was priced at $7 per share when it was offered and rose to around $11 at the time of this writing.

Murren, considering his past history on Wall Street, knows as well as anyone what it will take for CityCenter to be considered a financial success by the investment community. "It needs to generate incremental profits to MGM Mirage," he says. "It needs to generate operating income, which would be profits after we pay interest on debt." Murren hopes that CityCenter will turn $1.1 billion in condo sales this year, which would represent half the total units. The project currently has $1.8 billion in debt and an additional $6.7 billion invested via the joint venture with Dubai World. To become profitable, Murren explains, "CityCenter will need to generate $700 million. That is not possible now, but I think it will happen somewhere down the line. This year, though, CityCenter will be positive on operating cash flow [before debt considerations are met]."

Within the tighter confines of Las Vegas, where the economy has experienced the kind of high-impact crash that Baldwin had witnessed his $90,000 limos being put through, CityCenter's completion, in and of itself-regardless of when it starts to make money after debt payment-is a vote of confidence and a financial mainline. In a city that may finally be overbuilt, nobody is expecting anything like this to be on the boards for the foreseeable future. Still, though, Vegas has to continue moving forward in order to keep from dying. On that end, the completed CityCenter stands as an example of resiliency and a nod toward the future. "People who live here," says Murren, "view it almost universally as a symbol of hope."


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