Hard Times in the City of Sin

In May, the owners of the Fontainebleau sued Deutsche Bank, accusing it of trying to "minimize competition with the Cosmopolitan." It was for this reason, they claim, that the bank "aggressively pushed for" other lenders, including the crisis-shaken German bank HSH Nordbank, to back out of the deal.

Deutsche Bank calls the allegations "baseless." Meanwhile, Fontainebleau, struggling with a possible bankruptcy, has withdrawn some of its charges, but it hasn't abandoned its lawsuit.

Even without the Fontainebleau suit, the Frankfurt-based bankers are already likely to encounter major problems with their casino. The CityCenter, which is the largest private development project in the United States, is being built right near the Cosmopolitan. Designed by a number of famous architects, including Daniel Libeskind, Helmut Jahn and Norman Foster, the CityCenter comprises three luxury hotels with a total of 6,000 rooms, thousands of condominiums, dozens of restaurants and a number of gambling facilities.

The huge development, a joint venture of MGM Mirage and investors from Dubai, will cost $8 billion. The plan almost imploded in the spring for lack of funds, but now the center is slated to open after all next spring.

To fill the mammoth developments, the owners hope to attract more trade fairs and corporate events. Las Vegas is the world's largest meeting and convention city. In 2008, more than 22,000 events took place there, ranging from large-scale affairs, such as the International Consumer Electronics Show (CES) with its 140,000 visitors, to the annual meeting of the American Society of Anesthesiologists. And then there are thousands of company meetings large and small, many of them little more than trips meant to reward deserving employees who, after a meeting in the morning, can spend the rest of the day gambling and drinking.

Mafia Vegas vs. Vegas Inc.

For years, such meetings helped sustain the city. And that was the case until a new president came on the scene and -- in a single sentence -- declared Las Vegas the country's most dangerous spot for companies. "You can't go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers' dime," President Barack Obama said at a televised town hall meeting in February. A short time earlier, details had emerged about how Wells Fargo, a major US bank, had booked a 12-day company event in the city -- after having been saved from bankruptcy with billions in government bailout funds.

In the end, Wells Fargo canceled the event -- and many other organizations followed suit. "They are trying to make it out that Las Vegas has become this toxic city you can't even go to," complains Phil Cooper, a leading event manager. In the first quarter of 2009 alone, more than 400 conferences and trade fairs were cancelled.

"I certainly was not happy about it. What it did is put the imprimatur on Las Vegas being a place of excess," says Las Vegas Mayor Oscar Goodman, a lawyer who became a celebrity while defending the city's most notorious gangsters. In fact, Goodman plays himself in "Casino," Martin Scorsese's 1995 Oscar-nominated film about the Las Vegas underworld. But this hasn't stopped city residents from electing him to three terms as mayor.

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