Monday, January 5, 2009

Rumor Patrol: MGM Mirage

I got MGM Mirage VP Alan Feldman on the line today for this AFP piece on the start of hiring of the 12,000 or so employees for CityCenter. As usual, some interesting stuff didn't make it into the story.

I happened to be calling Alan after buzz on the Web had reached a fever pitch that (a) the company was this/close or even done with a deal to sell off the Mirage resort, (b) the Light Group has been pushed out of management of the Harmon hotel-condo and (c) plans are afoot to halt construction on some portion of CityCenter, most likely the aforementioned Harmon.

It seemed worthwhile in that cacophony to publish Feldman's direct responses to those issues.
(a) Mirage: After reiterating that as a publicly traded company that must seriously consider any serious offer to buy any of its assets, I asked if there was any credible offer now pending on this or any of the MGM Mirage properties. His careful, inconclusive response: "There is nothing of which I am aware." That said, he also made light fun of my question as well as that of "one of your colleagues from the local newspapers who called me breathless about the sale of the Mirage. And I asked him, 'Did you get the press release?' And he said, 'No, I didn't get a press release!' And I said, 'That's because there is none.' "

(b) The Light Group and The Harmon: On this, a bit more of a solid denial. "Nothing has changed. The Light Group is the managing entity of the Harmon. There’s been no discussion otherwise on the part of the company."

(c) A CityCenter Delay: "When Boyd made a decision to put a hold on Echelon, that gave everyone pause. Obviously we’re paying very close attention to what’s going on. We’ve also had to deal with structural issues. Some rebar had to be redone at the Harmon. That’s probably added to the rumor mill. We’re going to be make certain that CityCenter is the best it possibly can be when it opens. To the extent that any other decisions are made, we’ll make them and let you know in due course."

Oh, one more thing. On the condo front, there are about 2,400 condos for sale at CityCenter. About half are reserved with 20 percent non-refundable deposits. They've gotten virtually no new ones reserved in the fourth quarter of 2008. So is there danger that if they don't sell more of them they won't be able to fund the rest of the construction?

"We’re not one of these companies running on such thin margins that we need to close on these units to make these projects work. We’re on pretty solid ground and this is real estate that’s not going anywhere. As Las Vegas goes, this is still beachfront property.”

Get it? Beachfront property in Vegas? He made a funny. He also provided a lot and a little bit of information at the same time. Thoughts?


Mike Dobranski said...

People really need to start losing their jobs at the R-J and elsewhere for the unbelievable lack of journalistic integrity they have shown when it comes to this real estate market, with CityCenter and Lake Las Vegas being to two biggest glaring examples.

I can't say "all you media people" because I should also commend you, Steve, on getting two sides of the story and actually doing research with qualified people before you use your power as a published journalist, but I'm afraid you, don't have many people here in your same league.

The fact that the ENTERTAINMENT reporter is putting in false garbage in his column about the real estate market and construction issues he knows nothing about is just ridiculous. He has in his published column insinuated that Veer is leaning at an unexpected 44 degrees!

44 degrees!!!!

Now, I'm sorry, but anyone that got at least a D- in high school geometry can go on Las Vegas Blvd, eyeball Veer and say that it isn't leaning at 44 degrees. He really needs to stick to reporting about the last place Britney Spears took a dump and leave more serious issues to people that do their job.

This rumor-mill reporting does nothing but cause panic, buyers become fearful, lenders stop lending money, and projects go down the tubes.

I know it is important for you guys to get the "scoop," but when it comes to literally billions of dollars of people's money, and literally thousands of jobs at stake, these reckless journalists need to do their due diligence and be sure they are publishing the truth and not a bunch of false sensationalized garbage.

Thanks for having integrity, and thanks for encouraging your colleagues to do the same.

Chuck60 said...

A little of this..a tad of that. I'd venture that after considerable perusal of the economic indicators
(including a vastly increased number of comped room offers from MGM Mirage in my mailbox and e-mail accounts) that MGM is scrambling to attract patrons
like the rest of the gaming industry in Sin City. It's true from what I'm able to decipher from the facts /
partial truths / and outright avoidances of reality
by them all, MGM Mirage is among the most healthy
(or least sick) of the large corporate gaming entities. One of the areas that they all have to address is consumer confidence regarding their future ; it's obviously a vital aspect on their roads
to economic recovery. I'd say , in reality, it's all about "believe-it-when-you-see-it". This is what
you essentially suggested in other terms. Good job.

Chuck60 @

Anonymous said...

The 44 degree story about Veer was the most ridiculous of them all as the above comment suggests.

As for The Mirage, I expect a sale is in the pipeline. I've heard more than a few rumblings internally that a deal just isn't signed yet.


RJ Guy said...

by what source, hunter? see, when you put stuff out there like that without proper journalistic annotation, it merely lessens the credibility of the blogging community at large right when i thought, hearing you on Vegas Gang, you were hoping your credibility was finally being established. It already seems conclusive that your panel was completely wrong about the Light Group and the Harmon. Just saying.

Anonymous said...

RJ Guy,

I didn't publish anything on my blog about The Mirage being sold because I don't have it confirmed yet.

I would have to go back and listen but I'm pretty sure we made it very very clear on the show that we were talking about unsubstantiated rumors.



hunter - i love you, man, but you did twitter and facebook yesterday the following:

Hunter Rumor is that The Mirage has been sold but no details yet.via Twitter - 12:21pm - Comment


Hunter Could see an announcement in the AM perhaps.via Twitter - 1:22pm - Comment

When it comes from the publisher of a major Vegas website, it's going to be taken as more than conjecture no matter how carefully you couch it. Evidently you prompted someone in the local press to make calls on this. Just a thought.

Anonymous said...

Yes, I did post that on Twitter (and Facebook picks it up automatically).

I see your point I guess. The Twitter account you're talking about is my personal account, not the @ratevegas account that is the official voice of the blog.

I've always considered that separate but perhaps that was my mistake. I intentionally didn't post it on the blog because it wasn't confirmed.

- Hunter

Anonymous said...

As discussed on The Vegas Gang, The Harmon has significant structural problems and is being re-vamped.

Anonymous said...

Further evidence of why they call them "flacks." You can't believe a word they say - at least on the record.


But nothing about this development contradicts anything Feldman said. Feldman acknowledged the structural problems and said: "We’re going to be make certain that CityCenter is the best it possibly can be when it opens. To the extent that any other decisions are made, we’ll make them and let you know in due course."

OK, so due course meant two days later. But he didn't flatly deny anything. And it would seem this would be the right moment to push out Light Group if that was going to happen, and it evidently has not.

Anonymous said...

True enough, Steve. The good ones don't lie. They just gild the lily.