It's the largest private development ever built in the United States, and a year after its opening, CityCenter still holds an outsized sway over the Las Vegas hospitality market.
It has been an adventure: From opening a passel of boutiques and earning more than 20 industry awards to scrapping an unfinished tower and writing down the property's value, CityCenter, which turns 1 on Thursday, has provided its share of ups and downs for local gaming observers to follow. Both its successes and its stumbles offer important lessons and indicators as the city prepares to welcome yet another megaresort in The Cosmopolitan of Las Vegas, which is scheduled to open tonight.
At least a few of CityCenter's highs and lows have come from the nation's economic travails, which cut deeply into local spending among tourists and residents alike. Those struggles make it tough to evaluate CityCenter's success.
"You're judging the property's performance during the worst economic downturn in Southern Nevada's history, and in the nation's modern history," said Jeremy Aguero, a principal in local research and consulting firm Applied Analysis. "That seems to me to be an unfair landscape for a long-term judgment."
Still, tracking CityCenter's roller-coaster story offers clues to the market's direction as The Cosmopolitan prepares to open next door.
Start with what's gone right at CityCenter.
Jim Murren, chairman and chief executive officer of CityCenter developer MGM Resorts International, said the megaresort has performed admirably in some of its most important measures. Especially crucial, Murren said: CityCenter has generated new customers for the resort operator, rather than siphoning off big numbers of patrons from the company's nine other Strip properties.
"I would say CityCenter has been a very solid performer for us lately, and it certainly has been impressive, I think, given the environment that it has been in and the fact that it has been brand new," Murren said Monday. "For it to build its market share and for it to be profitable and not to have cannibalized the existing resorts we owned, I would say it's been very positive."
What is more, none of CityCenter's stores, either inside the 4,004-room flagship Aria or at the Crystals shopping center, has closed.
Crystals has added nearly 30 shops since it opened with 20 boutiques on Dec. 3, 2009. Among the additions: jewelers Cartier and Tourbillon; clothing and accessories stores Hermes, Lanvin, Prada and Gucci; and restaurants Mastro's Ocean Club, Social House and Puck Pizzeria/Cucina.
CityCenter has collected an armload of awards and honors, including kudos from the James Beard Foundation, magazines Conde Nast Traveler, Esquire and Food & Wine and travel website Orbitz. CityCenter won plaudits for everything from its cuisine to its interior design to its room technology. Travel club AAA gave both Aria and Mandarin Oriental its highest Five-Diamond praise -- an exceedingly rare honor in a resort's first year -- and Aria nabbed top honors from the Green Key Eco-Rating Program, designed to highlight hotels committed to improving environmental performance.
And though Murren acknowledged that Aria's occupancy started out lower than MGM would have liked, bookings inside the hotel have risen steadily, from 63 percent in the first quarter to 82 percent in the third quarter. The hotel-casino is selling out on some weekends, and its occupancy levels equal those of any local resort, Murren said.
"We've achieved that without sacrificing our rates," he said. "Had we simply wanted to fill the building, we could have heavily discounted and filled up to 100 percent right away. But that wasn't our business strategy, and we're glad we didn't do that."
Perhaps most importantly, after two quarters of losses totaling $383 million, CityCenter posted a profit in the third quarter, bringing in net revenue of $413 million and cash flow of $52.4 million.
Murren said the positive trends probably will continue in 2011, as Aria's convention bookings for the year look "extraordinarily strong."
On the flip-side, CityCenter has experienced its share of stumbling blocks.
That newfound cash flow? Credit it at least in part to "dramatic" write-downs of CityCenter's value, Aguero said.
MGM wrote down CityCenter's worth from $4.9 billion in October 2009 to $2.6 billion in August. CityCenter cost about $8.5 billion for MGM to build, and the operator still faces $13 billion in long-term debt. By the end of the third quarter, MGM had taken $600 million in impairment charges for reduced values, including a $279 million impairment on the unfinished Harmon.
The Harmon has grabbed its own headlines. Work on the hotel tower stopped after Clark County officials found that its structural work did not match building plans.
MGM executives said in November that it's unlikely the Harmon will ever be finished; CityCenter Chief Executive Officer Bobby Baldwin called the building "the poster child for nonconforming work worldwide."
There have been other construction-related woes. Perini Building Co. filed $491 million in mechanic's liens against CityCenter soon after the property opened, alleging that MGM hadn't paid Perini's subcontractors. MGM has negotiated payments with nearly all of the 223 vendors involved in the Perini action.
Nor can patrons ignore the shortened hours at many of CityCenter's restaurants.
Amore Patisserie at the Mandarin Oriental is the only eatery that is shuttered. A sign outside said it's closed for redevelopment, and Mandarin officials did not respond to an e-mail asking about future plans for the space.
But plenty of other restaurants, including Vdara's Silk Road and Aria's Bar Masa, Union and the SkyBox Sports Bar and Grill, are either closed two or more days a week or have dropped entire meal services, such as lunch.
Murren responded that resorts up and down the Strip see seasonal, temporary restaurant closings between Thanksgiving and Christmas.
The SkyBox is set to reopen on Christmas Eve as it ramps up for business in the first quarter thanks to the Super Bowl and other big sporting events.
And though Murren noted that MGM has not steeply discounted rooms at CityCenter, research from a gaming analyst does show some softness in the resort's rates.
Robert LaFleur, managing director of gaming, lodging and leisure equity research at Hudson Securities in Connecticut, said Monday that CityCenter's rates are flat to generally below where they were a year ago.
"But there is a lot of variability," he said, noting that Aria's December asking rates are down 8 percent on weekends and 36 percent on weekdays when compared with a year ago, even as advance rates for March are up 16 percent on weekends and 13 percent on weekdays year over year.
With the ups and downs, CityCenter drew attention for quirkier developments, from the Vdara "death ray" sunbeam that singed a Chicago attorney's hair in September to the Hollywood-tinged management dust-up at actress Eva Longoria's Beso Restaurant and Eve nightclub.