MGM Mirage Shines Rare Light on Vegas Strip

How the Las Vegas CityCenter project will look when it's finished.

There’s no guarantee that anyone’s coming to stay, but MGM Mirage's $8.5 billion CityCenter resort-condo-shopping megaproject will be ready just in case. The development, located in one of the nation's economic weak spots, began extending job offers to some 12,000 applicants for positions at the site, which is scheduled to open in December.

The Vegas media was enthused by the hiring—a bright point in a troubled economy. MGM Mirage claims that CityCenter is the “single-largest hiring effort in the United States.”

Unemployment in Nevada hit an all-time high of 13.4 percent in August, the foreclosure rate is at a national high, and gambling revenues tumbled 14.2 percent through July on the Strip. So when the state’s largest private employer starts putting 4,280 food servers, 1,300 casino workers, 1,200 hotel employees, and 130 masseurs on the payroll, it’s a better Monday than most.

More than 160,000 people applied for work at the Crystals mall, the Mandarin Oriental, Vdara condo-hotel, and Aria Resort-Casino. It will take a couple of weeks for all those hired to receive their calls or letters.

MGM’s stock price was down slightly on Monday but has surged to more than $13 since its low of $1.89 on March 25. Back then, the company was hours away from having to declare bankruptcy when some fancy banking footwork managed to cover an interest payment that recalcitrant partner Dubai World refused to make.

Yet Susequehanna Financial Group gaming analyst Robert A. LaFleur wrote with bafflement of the stock’s recovery just last week, insisting that those who think MGM is worth more than $12 a share "appear to be willing to overlook the still-lackluster fundamentals.”

The risks facing the company were laid out in today’s MGM press release: CityCenter’s opening denotes the end of one of the only large-scale construction projects going on in the gaming sector in Las Vegas. As CityCenter CEO Bobby Baldwin noted, the project has employed 9,000 construction workers during the last three years. Two other multibillion-dollar projects, Fontainebleau and Echelon, stand half finished on the Strip, with no resumption dates in sight.

So Vegas is up 12,000 service-industry jobs but down 9,000 high-paying construction jobs. And it also remains to be seen whether CityCenter’s opening will encourage new Vegas visitation or merely cannibalize other high-end resorts including the neighboring Bellagio, which has been the crown jewel of the MGM portfolio.

CityCenter, for years the most hotly anticipated development in Vegas and the nation, has seen surprisingly weak demand since reservations began being taken. Rooms remain available at Vdara on its opening night and at Aria on its second night for about $170 each.