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The $3.5 billion Cosmopolitan Resort & Casino in Las Vegas has come to stand for everything that could possibly go wrong with today's mortgage crisis. On Thursday Deutsche Bank AG announced the foreclosure of the property after developer Ian Bruce Eichner defaulted on a $760 million loan according to a report filed by Bloomberg News.
Germany's biggest bank weighed selling the complex after Eichner's January default, said the Bloomberg sources. Deutsche Bank is in the process of taking over the property and will begin speaking with other casino companies such as MGM Mirage and Hilton Hotels Corp. to help run its 80,000-square-foot casino, the people said.
``Deutsche Bank wants to be engaged in banking, not running a casino,'' said Matthew Clark, a London-based analyst at Keefe, Bruyette & Woods. ``They've had to decide between selling the Cosmopolitan into a bad market or holding on for better times.''
Ian Bruce Eichner, the project's New York City-based developer, previously lost two Manhattan buildings to creditors in the early 1990s, including the 75-story CitySpire Center at 150 W. 56th Street and the 45-story Bertlesmann Building at 1540 Broadway Ave. Cosmopolitan's default notice came less than two weeks after the project's chief operating officer, Audrey Oswell, left the company for the under-construction Fontainebleau.
Las Vegas has been hit unusually hard by recent economic woes with casino revenue down 16 percent in May, the fifth straight monthly decline, according to the Nevada Gaming Commission.
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Jagjeet Chiba, Gambling911.com
