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Lost CityCenter Value Tops $2B

LAS VEGAS-While the company's majority shareholder mulls its options, MGM Mirage will write off about $2 billion of lost CityCenter value.

By Brian K. Miller | Updated on October 20, 2009

LAS VEGAS-MGM Mirage said Tuesday believes the fair value of its 50% investment in the new CityCenter development on the Las Vegas Strip to be $2.44 billion. Double that for the total investment value and you get $4.88 billion. It was officially $2 billion higher earlier this year.

The revaluation was prompted by the company’s decision to discount the prices of its 2,400-unit residential inventory by 30%. “This decision and related market conditions led to the conclusion that the carrying value of the residential inventory is not recoverable,” MGM said in a statement.

CityCenter is a 50-50 joint venture of MGM Mirage and Dubai World. MGM said Tuesday it would take a $1.15-billion non-cash impairment charge in the third quarter related to its 50% portion of the lost value — $955 million for the commercial portion of the project and $174 million for the for-sale residential portion of the development.

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