Work on Echelon officially got underway in June 2007. The company halted construction on Aug. 1, saying it hoped to resume construction in nine to 12 months.
"Due to the continued deterioration in credit market conditions and the economic outlook, it is unlikely that we will resume construction in 2009," the company stated in its 10-Q filing this week. "Nonetheless, we remain committed to having a meaningful presence on the Las Vegas Strip."
Instead of resuming construction, Boyd says it will spend 2009 preparing alternative development options for the site. The options likely to be considered include developing the project in phases, alternative capital structures for the project, scope modifications to the project, and additional strategic partnerships.
"It will take several months to develop and consider the full range of options and it will take several more months to properly evaluate these options against the back drop of the conditions in the credit markets and the conditions in the broader economy," Keith Smith, the company's president, chief executive and director said in a recent conference call. "We will update you when we have a more definitive strategy on how and when we will move forward."
Its initial development partners for the project aren't expected to be involved if Boyd ever resumes on the project. Its agreement with Morgans Hotel Group Co., which was to help develop two of the hotels, was gutted in September and now allows for either side to terminate the deal by the revised financing deadline, which is now December 2009. Its agreement with financially beleaguered General Growth Properties for the retail component was dissolved last month.
As of the end of September, Boyd had spent $525 million on the project and expected to spend an additional $150 million over the next two quarters on items primarily related to steel fabrication.
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