learn stuff, review stuff, just stuff

CityCenter: A Symbol of Las Vegas’s Hubris

Reminder: Don’t use my work as a scholarly source OR plagiarize. At least one university knows about this site and has caught people copying from it. Do your own papers! (But feel free to go to the references, look them up, and use them in your own!)

CityCenter: A Symbol of Las Vegas’s Hubris

            Sin City.  Land of Lost Wages.  Glitter Gulch.  The Entertainment Capital of the World.  The city of Las Vegas has held many nicknames, but is rarely referred to outside that one mile stretch of Las Vegas Boulevard nicknamed “The Strip.”  The city was built for, and maintained by, one industry: tourism (Turley, 2005).  Riding high on extreme demand, Las Vegas suffered from idealism in the form of a golden goose that would never die.  With the recession of 2009, however, the world tightened their collective belts and Las Vegas suffered.  Slow to adapt to changing economic realities, huge risks were taken in a town where all odds are supposed to favor the House, and none were more prominent than CityCenter.  Planned and started before the collapse, CityCenter has become a symbol for the ego of Las Vegas, and has been forcibly kept alive through controversial means, but only time will tell if it was a mistake to continue feeding the behemoth that dwells on the Strip.

As Turley says, the Mafia originally built Las Vegas from a pit stop in the desert to a destination by building the Flamingo, the first “real” casino in the Valley, though the El Rancho (1941) and the Pair O’ Dice/Last Frontier (1930/1942) were both predecessors (History of Las Vegas, n.d.; Turley, 2005).  Eventually, the open mob ties were quieted down, then eradicated in favor of corporations that were not just “fronts” for illegal activity (Turley, 2005).  More casinos were built, and more people were needed to run the tables and clean the hotel rooms, and these people needed education for their children and health-care, grocery stores and gas stations, which eventually led to Las Vegas becoming the most populated city in Nevada, nearing two million in population in 2009 (Koebler, n.d.).  When faced with economic uncertainty in the past, casino owners have always had a “let it ride” philosophy, claiming that new casinos were never a bad idea, and that tourism would increase with each new resort, a theory that had held true until 2009 (Wargo, 2011).  They essentially believed that the gaming industry was “recession-proof” (Flanegin, Racic, & Rudd, 2012).  After two decades of booming growth, several new resorts, ample job openings, low or nonexistent taxes, and cheap housing, several aspects of city infrastructure were stressed to breaking, exacerbating the effects of the recession (Dickens, 2011).  “Built” in the 1950’s, the 2009 recession was the worst financial collapse the city had ever faced, and collapse, it did.  Foreign exchange rate, GDP, unemployment, and stock market returns were all proven to have a significant impact on casino revenue (Flanegin, Racic, & Rudd, 2012).  The huge drop in profitability of the casino resorts put Las Vegas into a tailspin, leading to the highest rates in the country for both unemployment and foreclosure in the depths of the recession (Dickens, 2011).

Some casino resorts along the Strip emphasized the reputation of an adult playground, with a large castle, a recreation of the New York City skyline, and a working pirate ship duel, but CityCenter planned to go in a completely new direction.  Rather than a theme of ancient Egypt or Rome, New York City or Paris, medieval times or the circus, CityCenter was a celebration of modernism and the trendy steel and glass architecture prominent today in high rise, high money, locations (Reid, 2010).  While much of the Strip caters towards middle class singles and families who have saved up for the trip, CityCenter’s Crystals shopping center has Louis Vuitton, Tiffany & Co., and Gucci for the higher-end customers who would be buying condo space within the center, rather than just the visiting tourists renting a room for a few days (CityCenter, 2013).  The complex utilized the talent of several world-renowned architects and artists to build and fill the rooms, lobbies, and even restrooms, making CityCenter itself an art gallery (Wharton, 2009).  This also marks a distinct change in philosophy.  While Las Vegas has previously focused on hotel rooms for tourists and visitors, CityCenter was planned with entire towers dedicated to condominiums, attempting to turn the Strip into the equivalent of a Manhattan loft over Central Park (Berzon & Swiff, 2010).

CityCenter was the newest resort planned and started before the market collapse, while others, like the Fontainebleau were planned, but were scrapped or stopped-in-progress when hardships started.  CityCenter was the only major project pushed through to completion, and it was certainly not without difficulty.  MGM Mirage, owner of several key resorts along the Strip, and Dubai World, the commercial arm of the Dubai, UAE government, were partners in CityCenter, considered the largest privately funded construction project in American history (Reid, 2010).  The project had originally been estimated at about $7.3 billion dollars, but costs had increased to around $8.5 billion (Miller, 2009a).  Both MGM Mirage and Dubai World were hit hard by the collapse, Wall Street stopped lending money, and Dubai World filed a complaint against MGM about the cost overruns and mismanagement as MGM filed for bankruptcy (Audi, 2009b).  Harry Reid, then Senate Majority Leader, and a Democrat from Searchlight, Nevada, stepped in to “speak” to Bank of America about guaranteeing the completion of the project (Audi, 2009a).  Bank of America was one of several banks to have received a bailout from the government, and was also the lender who stopped funding Fontainebleau.  However, with prodding from Reid, Bank of America provided a nearly two billion dollar loan and a guarantee to Dubai World that the project would be completed regardless of whether MGM went under or not (Audi, 2009a).  Such a move, in an election year, was certainly seen as controversial politically.

Harry Reid was able to claim that “saving” CityCenter meant “saving” 22,000 jobs (Damon, 2010).  There were between eight and ten thousand jobs in construction alone, more than twice as many as built the nearby Hoover Dam in the 1930s (Reid, 2010).  There were also around ten to twelve thousand operating jobs within CityCenter itself (Garrahan, 2011; Reid, 2010; Wharton, 2009).  Many of the initial positions were filled from other MGM properties first, and other casinos second, a common practice for new properties to hand-pick personnel who had already proven their abilities in the industry.  However, these numbers may also have been somewhat misleading.  CityCenter is one of several properties owned by MGM, which had to lay off nine thousand workers because of the recession, while CityCenter was still being completed (Miller, 2009a).  His Republican opponent, Sharron Angle, claimed that it was not the purpose of government to “step in” as he did, and that instead, government should stay out of business, allowing them to create jobs as needed (Damon, 2010).  Reid’s decision saved his job, as he was reelected, but whether it will save the city remains to be seen.

CityCenter, rather than becoming a savior for Las Vegas, is actually harming other properties on the Strip, and is not meeting any of its financial goals.  Occupancy was significantly down during the recession already, and CityCenter dropped an additional four thousand empty hotel rooms on the suffering economy, driving prices down even further (Berzon, 2010).  Now, when visitors come to Las Vegas, they are greeted with hotel rooms that are greatly discounted, but they can stay at new, higher quality rooms at CityCenter for about the same price as the older rooms at other properties, siphoning guests from the other hotels (Gregor, 2012).  Economics is too complex a field to be able to find direct cause and effect, but while CityCenter was celebrating its opening, the Binion’s, a long-standing casino-owning family, closed their downtown hotel and the Sahara closed down two of its towers, with Sahara completely closing down in 2011 after a fifty-nine year run (Wharton, 2009; Green, 2011).  As another casino owner, not affiliated with MGM Mirage said, CityCenter will only wind up “cannibalizing” the other MGM properties, like the higher-end Bellagio right next door (Miller, 2009b).  As of 2012, CityCenter has made $393 million in revenue, barely a dent in an $8.5 billion price tag, and over 1350 of the condominiums were turned into hotel rooms after the condos failed to sell (Gregor, 2012).  Of the 2387 condos, only 450 were sold by 2011 (Wargo, 2011).  Add to that, nowhere near “22,000 jobs” have been created, as the largest property in the complex, Aria, has about 5,000 “full time equivalents,” found by adding all the man-hours for all the workers and dividing by a 40-hour workweek (Benston, 2011).  Some of this is due to the large number of unoccupied rooms at the hotel, which require less labor in the form of housekeeping and customer service, and the company claims that it is simply “not filling” vacancies created when workers leave, not by laying off workers themselves (Benston, 2011).

Meanwhile, there is a tower in CityCenter which, despite its twenty-six stories of glass, steel, and concrete, is used simply as a billboard and traffic director for the rest of the complex.  The Harmon, sitting at the corner of CityCenter, has been severely criticized by engineers and safety inspectors who claim that it would collapse in one of Las Vegas’ not infrequent earthquakes due to faulty building materials and practices (Garcia, 2011).  It was initially planned to be forty-nine stories tall with two hundred condominiums and four hundred hotel rooms, with no gaming facilities, but was “topped off” at twenty-six stories when inspectors discovered rebar problems on fourteen floors, such as out of place bars, and ties that looked like they had been cut with a torch (Benston & Shoenmann, 2009).  Rather than an expensive, and time-consuming, fix to the major issues, the Harmon will be dismantled and demolished, leaving the space open for MGM to try something new.  With current condos failing to sell, it seems likely that MGM will choose a new direction for this space that currently sits at a street corner and next to the Cosmopolitan, perhaps as an entertainment focus building to draw in pedestrian traffic.  This may well be the hardest blow to CityCenter as at least eighty-eight of the planned two hundred units were already under contract, many to celebrity clientele happy to spend extra for the privacy afforded by a non-gaming boutique location, each to receive a full refund of as much as tens of millions of dollars (Benston & Schoenmann, 2009).

CityCenter’s success or failure is important not only to the wealthy owners of Strip properties like MGM’s Kerkorian, Steve Wynn, or Sheldon Adelson, but to the 2.7 million residents of Nevada (Public Data, 2012).  Nearly two-thirds of the current Nevada budget relies on gaming revenue, a main reason for the “low to nonexistent” taxes mentioned earlier (Benston, 2011).  Education and healthcare have long been underfunded in the Silver State, but if CityCenter cannot start bringing in tourists and living up to its hype, the catastrophic impact of a huge Strip failure would reverberate across the state, already in negotiations with public workers like firefighters and public school teachers about pay cuts (Benston, 2011; Dickens, 2011).  Unemployment and foreclosure rates may have meant a drop in population for the most populated area in the seventh largest state, but diversifying industry is not an emergency fix, and the tourism and gaming industry will have to be innovative to bring consumers back to the Valley without the money in hand to build the next “big shiny.”

CityCenter has had its share of trouble leading up to its opening, and will see more in the future as it comes to terms with the Harmon and its lawsuit, but it has become a symbol of Las Vegas.  Believing that the customers would come to the opening, rejuvenating the industry as every major opening had before it turned out to be a pipe dream, and it is still unclear whether the urbanist, modernist theme will prove popular with crowds eager to leave their high-rises for the fantasyland that has been a top destination for half a century.  Without the pressure from Senator Reid, there is no telling whether CityCenter would be completed or another rotting hulk like the Fontainebleau, but there is also no telling whether Las Vegas’ recovery will be easier or harder with CityCenter positioning itself as the center of the Entertainment Capital of the World.  Its future is largely tied to the future of Las Vegas itself.  If one succeeds, it is likely the other will as well.  However, this $8.5 billion wager is still far from a safe bet, and with nearly three million people’s livelihoods riding on the line, the outcome is incredibly important.  That means three million people, hoping and praying that the next hand is the royal flush.


Audi, T. (2009a).  Deal keeps $8 billion Las Vegas City Center project alive. Daily Bankruptcy Review.  Retrieved from ProQuest.

Audi, T. (2009b).  Las Vegas City Center Gets Funding.  Wall Street Journal- Eastern Edition, 253(100) p. B3.  Retrieved from EBSCOhost.

Benston, L. (2011).  CityCenter cutting labor by not filling vacant jobs. Las Vegas Sun. Retrieved from http://www.lasvegassun.com

Benston, L. & Schoenmann, J. (2009). MGM Mirage cancels CityCenter condo project. Las Vegas Sun. Retrieved from http://www.lasvegassun.com

Berzon, A. & Swiff, K. (2010).  Resort’s Troubles Loom in Las Vegas.  Wall Street Journal- Eastern Edition, 255(106), pp. B1-B2.  Retrieved from EBSCOhost.

CityCenter. (2013).  CityCenter Las Vegas. Retrieved from http://www.citycenter.com

Damon, A. (2010).  Jobs at CityCenter give Harry Reid 22,000 talking points.  Las Vegas Sun.  Retrieved from lasvegassun.com

Dickens, D. (2011).  Is Las Vegas a “Real City”?  UNLV Gaming Research & Review Journal, 15(2), p. 119-120.  Retrieved from EBSCOhost.

Garcia, O. (2011).  Engineer: CityCenter’s Harmon would collapse in earthquake.  Las Vegas Sun.  Retrieved from http://www.lasvegassun.com

Garrahan, M.  (2011).  The unconventional gambler.  Financial Times, 12.  Retrieved from ProQuest.

Green, S.  (2011).  Sahara’s closure on May 16 will mark ‘the end of an era.’ Las Vegas Sun.  Retrieved from http://www.lasvegassun.com

Gregor, A.  (2012).  Las Vegas Project Survives a Case of Bad Timing.  New York Times.  Retrieved from nytimes.com

History of Las Vegas. (n.d.). History of Las Vegas Hotel/Casinos. A2Z Las Vegas.  Retrieved from http://www.a2zlasvegas.com

Koebler, J. (n.d.).  10 Metro Areas with the Largest Population Growth.  US News and World Report.  Retrieved from http://www.usnews.com

Miller, M.  (2009a, Dec. 16).  CityCenter Lives!  Forbes.  Retrieved from forbes.com

Miller, M. (2009b, Dec. 19) Can CityCenter Save Las Vegas? Forbes. Retrieved from forbes.com

Public Data. (2012). Population of Nevada, U.S.  Retrieved from http://www.google.com/publicdata

Reid, R.  (2010).  A Glittering Center.  Civil Engineering, 80(7), pp. 48-92.  Retrieved from ProQuest.

Turley, A.  (2005). Urban Culture: Exploring Cities and Cultures.  Upper Saddle River, NJ: Prentice-Hall.

Wargo, B.  (2011).  16 months later, CityCenter has yet to hit its stride.  Las Vegas Sun. Retrieved from vegasinc.com

Wharton, T.  (2009).  CityCenter: Las Vegas’ newest, greatest, mega-resort.  The Salt Lake Tribune.  Retrieved from ProQuest.


02/18/2013 - Posted by | College Papers, Learning

1 Comment »

  1. fantastic

    Comment by sw | 04/07/2013 | Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: