3700 Associates Defaults on Cosmopolitan Loan

LAS VEGAS-Deutsche Bank this week delivered a notice of loan default to the developer of the 4 million-sf Cosmopolitan Resort and Casino under construction next to the Bellagio, according to Perini Building Co. Inc., the general contractor for the project. Perini says construction work continues and all current amounts due to Perini have been paid pursuant to the terms of the construction contract. The project has been scheduled to be complete in December of 2009.

Rising at Las Vegas Boulevard and Harmon Avenue, the development includes 3,000 condo-hotel units Hyatt; 300,000 sf of retail; a 75,000-sf casino; an 1,800-seat theater; 150,000 sf of meeting space; multiple night clubs; a five-acre “beach club” and; a 3,900-space underground parking garage. The condo-hotel units are to be housed in a pair of 53-story, 600-foot-tall glass and concrete towers atop a five level podium that will house the casino, meeting space and theater. The retail space is slated to front the Las Vegas Strip and be filled with brand-name retail shops. Hyatt Hotels Corp. was named the future operator of the resort in 2005.

The developer is 3700 Associates LLC, which is led by Ian Bruce Eichner, a well-known developer in Miami and New York, and gaming developer David Friedman, who helped finance and develop the Venetian. Their money partner is an affiliate of Dune Capital Management LP, which is controlled by Steven Mnuchin, the former CEO of SFM Capital Management LP, a Soros Fund Management LLC affiliate. Dune provided the majority of the capital to, and is the managing member of, 3700 Associates.