In a story published Thursday in the Review Journal newspaper here, Cosmopolitan Chief Operating Officer Scott Butera said the parties are finalizing the terms of the recapitalization agreement with the project's lender, Deutsche Bank, and that Eichner will continue to have a role in the 4 million-sf development under construction next to the Bellagio. "Eichner's an important part of the project," said Butera. "But a substantial amount of the equity will be supplied by Marathon and Hyatt."
A source with Global Hyatt told GlobeSt.com on Thursday that "Global Hyatt has not formalized a deal with anyone" related to the Cosmopolitan Resort and Casino. Butera and Deutsche Bank did not respond to a GlobeSt.com request for confirmation and comment. Deutsche Bank and Marathon also did not return phone calls seeking comment.
In January, Perini Building Co. Inc., the publicly traded general contractor for the project, reported that Deutsche Bank had delivered a notice of loan default to Eichner's 3700 Associates LLC but that construction work would continue without interruption because Deutsche Bank was guaranteeing monthly payments.
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.
In addition to Eichner, a well-known developer in Miami and New York, 3700 Associates includes gaming developer David Friedman, who helped finance and develop the Venetian, and 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.
Eichner said in a statement sent to GlobeSt.com in January 3700 Associates LLC was working with Deutsche Bank and Merrill Lynch to find new investors and that conversations were ongoing. "This action by our lender comes as no surprise," Eichner said. "With the current challenges within the real estate and debt capital markets, which are out of our control, being felt across the country, we both anticipated and planned for this."
The project went vertical in April. As of year-end, work remaining to be performed under the construction contract totaled approximately $1.4 billion.
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