Las Vegas Megaresort Defaults on Financing

Las Vegas— Construction of the $3-billion Cosmopolitan casino resort project on the Las Vegas Strip will continue toward its planned December 2009 opening despite the project's developer defaulting on a construction loan. Perini Building Co., contractor on the project, has received an interim

commitment from Deutsche Bank that guarantees continued payment for construction work while the owner and the banks work on new financing for the resort project rising on an 8.5-acre site between MGM Mirage's Bellagio and its mammoth CityCenter project, also under construction.

Bruce Eichner, Cosmopolitan's New York-based owner and developer, received a notice of default on a $760-million construction loan from Deutsche Bank after missing a payment when he was unable to secure refinancing for the project. Deutsche Bank and Merrill Lynch are working with Eichner and his management team to find new investors.

Perini said current bills have all been paid, but nearly $1.4 billion in work remains to be completed under the current construction contract, and that work will continue, unaffected by the default notice.