After a report last week regarding the City Center Project being in the position of looking at a stoppage of construction, that happened to a project on the strip on Friday. Boyd Gaming announced that it would suspend construction of their 140,000 sq foot Echelon Project on the site of the old Stardust Hotel. This coming after its business partners failed to come up with financing for the 300,000 sq foot retail sector and two boutique hotel phase of the project.
This stoppage is expected to last between nine to twelve months as the Boyd group awaits a resurgence in the credit sector and gaming industries, along with renewed consumer spending. From Boyd’s end, they had there financing in place, as they had already secured 4.8 Billion USD in inexpensive financing for the project. To date Boyd has spent approximately 500 million USD of their 3.3 Billion USD budget on the project pursuant to the stoppage nearly 800 workers found themselves out of work on Friday.
This stoppage continues a trend in the casino industry as this yet another project to be halted due to credit issues, due to an ever tightening US & Global Economy. Some of the projects that have been affected are City Center, The Cosmopolitan, as well as a project on Las Vegas Boulevard in which Crown Casinos Ltd. backed out of a 5 billion joint venture.
On a positive note for Boyd Gaming they released plans to buy back 100 million USD worth of commonly trade stock, upon which their stock made a 20 rebound despite 2nd quarter earnings report of -9.9 vs. last year. The stoppage of Echelon project has given Boyd Gaming stock some strength as it is now lowered its risk level.
Hopefully, as we look to the future the casino industry will see a resurgence along with US and Global economies. Other wise this trend will continue, and we may even begin to see Hotel Casino’s begin closing doors.
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