CityCenter still selling condos despite slowdown

By Liz Benston

Friday, May 9, 2008 | 2 a.m.

While some Las Vegas condos are in foreclosure as buyers walk away from purchase contracts, MGM Mirage — defending a lawsuit filed by unhappy Signature condo-hotel owners — says no buyers have canceled purchases at CityCenter despite the housing slump.

During a conference call in which the company partly blamed a 30 percent decline in first quarter profit on the slowed economy, executives said MGM Mirage has sold 52 percent of its condo and condo-hotel units at CityCenter for $1.7 billion, an average of $1,264 per square foot. Sales have slowed to a few dozen units over the past few months, though sales at CityCenter accounted for the vast majority of condo purchases in the quarter, executives said.

MGM Mirage hopes to kick off the August launch of its CityCenter sales center in the United Arab Emirates by selling 100 units to people in Dubai about the same time it expects to top off the main hotel-casino building. Other CityCenter structures will be topped off over the next several months, with the Crystals retail center available for tenants to fit out in February, executives said. A Swiss-made tram system connecting the Bellagio, CityCenter and the Monte Carlo will be complete by July, when CityCenter’s 6,100 or so construction crew members will swell to at least 7,500.

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Bigwigs from International Game Technology’s biggest competitors — including Bally Technologies, Aristocrat Technologies and WMS Gaming — have recently toured the slot giant’s $10 million “interoperability center” in Reno.

Unthinkable in the old days when slot manufacturers developed top-secret and often incompatible components, the test lab allows competitors to test server-based games and systems and is the latest example of an emerging cooperative landscape as companies work toward a standard communications protocol.

Server-based systems allow casino operators to download games and slot machine features from a central computer server within minutes instead of replacing a slot machine’s computer chip by hand. It is a critical milestone in the gaming industry, perhaps not unlike the development of the Internet, which paved the way for e-commerce. But unlike the Web, the gaming business is subject to regulation by hundreds of regulatory agencies and involves secure networks with sensitive information, such as slot accounting and player tracking systems. The bigger and more accessible the network, the better the opportunity for all.

“We’re not trying to make money off the tollbooth. We’re trying to develop the best cars to put on that information highway,” said Ed Rogich, IGT’s Vice President of Marketing. “And that’s going to come from service applications and new game concepts.”

Developing products that are compatible yet differentiated enough won’t be easy.

No wonder that CityCenter, with the clock ticking on a fully networked gaming floor, obtained letters of assurance from several manufacturers before announcing the expected debut of its server-based technology, more than a year before it is scheduled to open in November 2009.

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At Wynn Las Vegas, dealers who organized through the Transport Workers Union last year — but have yet to sign a labor contract — are now in the midst of a union decertification effort.

Steve Wynn is opening his Encore resort next door and has notified unionized dealers they aren’t eligible for jobs there while contract negotiations are under way. Dealers also were notified that they would not be eligible for improvements in their health insurance in the interim.

Ergo, the effort among some dealers to decertify the union. Just as the dealers who were upset by Wynn’s policy of sharing tips with supervisors were organized through an Internet campaign, the decertification drive is playing out as well on the Internet, at www.wynnnonuniondealers.com.

The Web site asks dealers what their union has done for them lately.

Management at Wynn Las Vegas is observing the drama from a distance while dealers urge their peers to stick together, saying a union with no contract offers more job protection than no union at all.