The massive Las Vegas Cosmopolitan casino and hotel resort was to hold its grand opening Wednesday after Germany’s biggest bank stepped in and rescued the project because the original developer defaulted on a loan from the bank.
It is a difficult time for the casino industry in the United States. America’s leisure and gambling capital has been hit harder than virtually any other US city by the financial crisis.
The 3,000-room hotel and casino complex, which cost about $4 billion (€3 billion) to build, is running against the grain in Las Vegas, where business has slumped. It was the last major resort approved for development before the financial crisis hit.
Deutsche Bank foreclosed on the original developer and took over the project in 2008 after no other buyer could be found. The slump in the gambling industry that followed the financial crisis of 2008 has sent home foreclosures in Nevada – the state in which Las Vegas lies – soaring to the highest rate in the US.
Unemployment has risen faster than in any other state and now sits at 14.2 percent.
Nevertheless, the hotel’s grand opening is looking to dazzle potential visitors. It will feature a concert by Brandon Flowers, frontman for the rock bank The Killers, which comes from Las Vegas.
Deutsche Bank insists the hotel is purely an investment and it is not looking to get into the gaming business. The financial institution was “no hotel operator but primarily a bank,” a spokesman in Frankfurt said. The goal would eventually to be to sell the casino complex, though the bank is unable to say at present when that might be.
Analysts regard the Cosmopolitan development as ambitious. One insider said the bank was placing itself in a “difficult economic environment” with the investment.
The massive project has 3,000 rooms, a casino area the size of two football fields, several restaurants and shops and a luxury fitness and beauty spa, making it one of the biggest developments in the over-the-top gambling mecca.
The number of visitors to Las Vegas has plummeted in recent years, though it has started to rise slightly, if not nearly to the point where property developers are building new hotels or gaming venues.