Project City Center, Las Vegas, postpones and scales back Harmon condo component

The Harmon Hotel & Spa Opening to Be Postponed and The Harmon Condominium Component to be Cancelled
August 11, 2010

CityCenter Holdings, a joint venture between MGM Mirage Corp. and Infinity World Development, today announced scope changes related to the Norman Foster-designed Harmon Hotel & Spa which include postponing the opening of the hotel to late 2010 and cancelling The Harmon residential condominium component.
 

CityCenter Holdings is developing the 67-acre Project City Center on the Las Vegas Strip. The Harmon is one component of the CityCenter complex. Other components include a new Mandarin Oriental Hotel designed by Kohn Pedersen Fox, the dual Veer condominium towers designed by architect Helmut Jahn, the Aria Hotel and Casino designed by Cesar Pelli, and the Vdara condo/hotel designed by Rafael Vinoly.

The Harmon Hotel & Spa is now planned to included approximately 400 rooms and suites. The Harmon had planned for approximately 200 residential units, of which 88 are under contract to be sold. Purchasers will be entitled to receive refunds of their deposits, but will be given the opportunity to purchase units at the Residences at Mandarin Oriental Las Vegas, Vdara and Veer Towers. Construction at The Harmon will continue through completion of the structure and exterior, with interior fit out to be deferred.

With the cancellation of The Harmon residential component as well as other additional cost savings the company anticipates total cost savings of approximately $600 million up from its previously stated $400 million. In addition, by postponing The Harmon Hotel by one year CityCenter will defer approximately $200 million in construction costs to complete the interior fit out of The Harmon.

"By cancelling The Harmon condominium component, we will be able to avoid the need for substantial redesign of The Harmon resulting from contractor construction errors," said Robert Baldwin, President and CEO of CityCenter. "In taking these steps related to The Harmon we can remain focused on maximizing the operating performance of Aria, Mandarin, and Vdara to their desired levels."

All other components of CityCenter remain on schedule for a December 2009 grand opening. Aria Resort & Casino will feature approximately 4,000 rooms and suites, 150,000-sf casino, fine dining and world-class entertainment. The Mandarin Oriental Hotel & Residences will feature 400 hotel rooms and 227 residential units and will be managed by the Mandarin Oriental Hotel Group. Veer Towers will contain 670 residential units in two towers surrounded by retail, restaurants, and entertainment. Vdara will be a 1,495-unit hotel-condominium tower. Crystals retail and entertainment complex will offer approximately 76 outlets featuring high-end fashion, boutiques, dining and entertainment venues. It was designed by Studio Daniel Libeskind.

"The construction progress to date on this enormous project is nothing short of incredible," said Mr. Baldwin. "Over the next 11 months we will begin energizing these architecturally beautiful buildings with the hiring of more than 12,000 individuals for this dynamic resort complex. Creating this many jobs will have a tremendous impact for both Las Vegas and the State of Nevada for many years to come."

"We have full confidence in the long term future of the Las Vegas market and the success of CityCenter," said Chris O'Donnell, Chief Executive Officer of Infinity World Development Corp. "This is an appropriate action in the current circumstances."

In October 2008, CityCenter secured a $1.8 billion senior bank credit facility which can be increased to $3.0 billion. Both sponsors continue to actively pursue additional financing for the project.

"These scope changes received overwhelming support from our CityCenter bank group," said Dan D'Arrigo, Executive Vice President and CFO of MGM Mirage. "CityCenter has two supportive sponsors who are fully committed to this project. We will continue to seek financing that is in the best interest of CityCenter as well as its sponsors."

         
 

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