CONSTRUCTION UPDATE

The Cosmoplitan

Cosmopolitan Completes First Year of Construction in Las Vegas

Two 600-foot Towers Containing 3,000 Condominium-Hotel Rooms

By Arnold M. Knightly
Las Vegas Review-JournalMcClatchy-Tribune Business News

Apr. 10, 2007 - After a year of digging down, construction on the Cosmopolitan began its ascent skyward Monday with the placement of its first 50-foot high steel beam.

"I think when you have construction as complex as this you take it in pieces," New York developer Bruce Eichner said. "First was the excavation because you have site constraints."

The placing of the steel beam cornerstone was part of a Japanese ceremony traditional in construction in that country.

Kay Tonogai, deputy general manager for the Japan-based steel manufacturer JFE Engineering Corp., said the ceremony is to ask the local god to make the building sturdy and safe and ensure happiness for the project.

Board member and JFE Engineering Senior Vice President Takeshi Onda performed the ceremony. About 100 people representing the projects partners and the media attended. Tonogai added that he believed it was the first time the ceremony had been performed in Las Vegas on a Strip project.

The event also included a burying of a time capsule containing engineering drawings signed by Eichner and the construction partners.

The 8-acre construction site is wedged between the MGM Mirage's Project CityCenter to the south and west and Bellagio to the north. The Jockey Club shares the borders with the Cosmopolitan site on the north.

Eichner said that his company is providing parking and valet service for Jockey Club patrons during construction to help minimize the construction's inconvenience of the property's visitors.

The Cosmopolitan will connect with CityCenter on the second floor with a pedestrian bridge over Harmon Avenue.

"It is not encroaching on our design," Cosmopolitan Chief Operating Officer Audrey Oswell said. "We were able to achieve the design we were looking for and build the amenities into the project we wanted to with the footprint that we have."

Two 600-foot towers will contain the 3,000 condominium-hotel rooms. The property is also scheduled to have a 75,000-square-foot casino, 150,000 square feet of convention space, as well as restaurants, shops and a 50,000-square-foot spa.
Eichner secured $415 million in construction financing in January 2006 from Deutsche Bank to help complete the project's underground elements.

Reservations on the condominiums began early 2005 with some reservations converted into hard sales that April. Eichner said the 2,000 condominium units are 90 percent sold with a total sales volume of $1.9 billion.

Grand Hyatt will manage the condominium rental program while the Hyatt Corp. will manage convention space. Oswell said the property is already booking convention reservations from group businesses for 2010.

Cosmopolitan will manage the hotel and casino.

Eichner said proximity to Bellagio, Project CityCenter and the redeveloped Planet Hollywood Hotel across Las Vegas Boulevard South, will only add value to his property on the northwest corner of Harmon Avenue and the Strip.

"I think it is safe to say when construction is completed, it is going to be 'the corner' in Las Vegas," Eichner said. "I think the Strip-centric architecture and program is unique."

The Cosmopolitan originally broke ground in October 2005. Perini Building Co. has spent the past 12 months excavating 60 feet down, described by a Cosmopolitan spokeswoman as "one of the deepest digs in Las Vegas history," and removing 800,000 cubic yards of dirt to make room for a four-level parking structure and foundation for the project.

The concrete and bolts lining the pit is the structural framework for a 4,000-space underground parking garage and casino and shops that will front the Strip.

Mike McLean, vice president of field operations for Perini, said working on the 330,000-square-foot construction site is only part of the most complex and challenging site he has encountered.

"I've been involved with this project for three years," McLean said. "The site is an unique issue in this market in general. Fortunately, we only have to go through Bruce (Eichner) for a decision. He is very hands-on."

The construction company is also building the neighboring Project CityCenter, making logistics such as a construction staging area and in-and-out access easier, McLean said.

A development group led by David Friedman, a former executive at The Venetian, bought the site for $90 million three years ago this month. Friedman brought Eichner and the Hyatt to the project but resigned his role as company president in December 2005.

Oswell, a former Atlantic City casino executive, joined the project as chief operating officer in June 2006. Oswell is the former chief operating officer of Resorts Atlantic City, and the former president and chief operating officer of Caesars Atlantic City.

Key Facts

COSMOPOLITAN

• Scheduled to open: late 2009
• Cost: $3 billion
• Owner: New York developer Bruce Eichner
• General Contractor: Massachusetts -based Perini Building Co.
• Architect: Miami-based Arquitectonica
• Executive Architect: Freidmutter Group
• Designers: Dougall Design; Paul Duesing
• Partners: Martha Schwartz Partners

If you are interested in learning more about this condo hotel, please feel free to ask specific questions or request our detailed data sheet. We will respond within 24 hours (usually much sooner). Contact Maria Lopez at Maria@CondoHotelCenter.com or call (305) 944-3090.