Bad bets in Las Vegas
Deutsche Bank AG probably never wanted to build a casino. But now it's stuck with a foreclosed project under construction.
The bank now owns a disaster in Las Vegas called Cosmopolitan Resort & Casino. The project's developer foreclosed on it last year, and Deutsche Bank had to choose between selling the project or finishing it.
It chose to finish it. And now, things are so bad that water must be pumped out of it non-stop after workers hit an underground aquifer.
Deutsche Bank also made some other bad bets in Vegas, such as lending money to the now-bankrupt Station Casinos and the unfinished Fontainebleau, according to Bloomberg.
Cosmopolitan is supposed to have two high-rise condo and hotel towers, a resort and casino. Its construction price tag has zoomed to $3.9 billion from $1.8 billion, and Deutsche Bank has had to write down $748 million on the project, Bloomberg reports.
Right now, Cosmopolitan is the most expensive project for a single lender in Las Vegas.
“Any construction project of this size runs into problems,” a real estate market researcher told Bloomberg. “But to bump into an aquifer is just bad luck.”
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