DOW JONES NEWSWIRES
MGM Mirage (MGM) announced plans to take a $955 million
write-down in the third quarter on its CityCenter project in Las
Vegas.
The project was nearly doomed earlier this year amid financing
concerns and a battle with joint venture partner Infinity World
Development Corp.
In addition to the write-down on its investment in the project,
MGM said it will record an additional $174 million write-down on
the recent price cuts on residential property at the site. Infinity
will see a same-size write-down.
The company announced two weeks ago it was cutting the price of
the condos at its $8.5 billion CityCenter development by 30% due to
the economic downturn. The move is intended to address a growing
backlash from many of the people who signed contracts on condos in
the 2,440-unit complex during the height of the Las Vegas real
estate boom. Many had said they would have trouble closing on those
units now that financing has become harder to obtain and the market
in Las Vegas for luxury condos has crashed.
Investors and observers had anticipated a price cut from the
company for some time.
The multi-towered CityCenter project, which is situated on 67
acres on the Las Vegas Strip, is expected to open in December as a
mixed-use complex with residential, retail and casino spaces.
MGM will release its third-quarter results Nov. 5. Its stock was
up 0.4% premarket at $11.85.
-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com