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StumbleCosmopolitan resort hit with another investor suit
Published Monday, July 19, 2010 | 4:40 p.m.
Updated Monday, July 19, 2010 | 10:43 p.m.
A view of Harmon Avenue and MGM Mirage's CityCenter project on Wednesday, Nov. 18, 2009. The Cosmopolitan Resort tower is shown under construction at right.
Sun archives
Map of Cosmopolitan of Las Vegas
Cosmopolitan of Las Vegas
3708 S. Las Vegas Blvd. , Las Vegas
Owners of a casino-hotel resort due to open later this year on the Las Vegas Strip are being sued by condominium buyers who allege the residential units they bought in 2005 aren't being built after all.
Cosmopolitan of Las Vegas owners Deutsche Bank and Nevada Property 1 are accused in a lawsuit filed Monday in Los Angeles of fraudulently keeping nearly $100 million in escrow deposits paid for condos that were to open in early 2008.
The fraud and conversion lawsuit filed by three southern California residents comes after they and more than 200 other people sought an injunction in Nevada state court in Las Vegas last Thursday alleging the developers of the $3.9 billion project are turning their condos into hotel rooms.
Amy Rossetti, spokeswoman in Las Vegas for the project developer and Deutsche Bank, called the claims "entirely without merit."
The California lawsuit accuses the developer of "capitalizing on the recession" by delaying construction, then "stonewalling" condo buyers while secretly scrapping plans to include 2,000 condos in two towers totaling some 3,000 rooms.
Owner Deutsche Bank paid about $1 billion for the half-finished development in August 2008 after New York developer Ian Bruce Eichner and his company, 3700 Associates LLC, entered foreclosure. The German bank decided to finish and open the resort.
The resort announced last month that it was taking reservations for a Dec. 15 opening of about 2,000 of some 2,995 hotel rooms. It said 987 rooms would be delayed to July 2011. The hotel website advertised opening night room rates starting at $300.
The Las Vegas complaint asks a Clark County District Court judge to order disclosures from the company about plans for the project and stop the rental of condominium rooms.
"After a nearly three-year delay in construction, plaintiffs are now receiving mixed signals as to whether their units will ever be delivered to them as promised," the complaint said.
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Does this mean we get to put the Cosmo back on our Great Ruins of Las Vegas Tour?
Yet another in a long list of the greed, fraud, and lack of vision for Las Vegas's future resulting in another of historically proportioned financial disasters and missteps which further cripples our economy and tourism product.
Once again Big Business, a foreign bank at that, figures out a way to make money by failing to perform on a contract. The deep pockets ability of large firms to keep legal due process from occurring should be a wake up call to Americans everywhere. This is not about just another group of property purchasers losing monies on a investment NO this is about how big business has figured out one more way to take advantage of not only their "too big to fail status" but their belief the Bank is "TOO BIG
TO BE BEATEN BY THE LITTLE GUY IN THE EYES OF THE LAW". Hey, maybe Deutche Bank is right about not living up to contractual requirements after-all Deutche was rewarded for this behavior by retaining nearly 100 MILLION American dollars by frightening investors into giving back their units at a huge loss of deposit monies. Funny, Deutche did not even have a plan filed with the building department showing any Condo's being built on the site rather it only showed a hotel. I can only imagine the executives at Deutche laughing all the way to the bank. Oh wait, they only needed to go downstairs.
Nevada law requires condominium projects of this size to be subdivided. At this time, only 6 months before an announced grand opening Deutche does not even have an approved subdivision map with the building department. Do not let the Deutche bank spin machine fool you about who is getting the shaft here. Maybe yesterdays motto of "It's just business, It's nothing personal" might just apply here.
One more loop hole found by endless amounts of legal dollars spent by a giant corporation. America BEWARE, this is not the first or last time big business will beat up on the little guy. The time of hit men is mostly over it is now the time Giant Corporations use the legal system
to reap huge profits by failing to meet even their most basic legal requirements. After all, how many of us can sue a giant corporation even if we are completely in the right.
City Center looks great at the night time. Similiar to meeting someone after having cocktails at bar/club etc. However, the next day you wake up you see the cold looking concrete and steel, then realize how much money you spent. Not a very nice place. I talk to a lot of customers that have stayed at cc and they don't like it. A good deal of these people have a lot of money, car dealership owners etc and they say it's too expensive.
I would bet customers are getting screwed from the bank. When has a bank really wanted to help the average guy/gal? I feel for the people in the law suit.
Sue the banks and send them to Jail..The banks are what started the whole melt down and have been screwing the average guy with hold-ups, delays, etc...Talk about crooks..the mob is nothing compared to today's banks !!!
Martin9, those are the room rates for opening night, which happens only once and is a big deal. Have you been to any casinos on opening night? Tons of people who for some unknown reason want to be able to say they were there the night it opened.
They will have no problems filling Cosmo on opening night. Every night after that is a whole different story though.
If the condo buyers bought while the project was owned by Eichner, are those contracts still valid if Eichner goes into foreclosure? Does Deutsche Bank have to honor any of the contracts signed by Eichner?
I reserved a room for the Cosmopolitan's opening night but decided to cancel it after seeing this story. I can't believe these massive banks and their arrogance. They think they can do whatever they want with the American public. These guys need to be taught a lesson. I for one do not want to stay in a place that has the stench of corruption all over it.
Seem all the comments are ignoring the fact that the "big banks" have lost billions in Vegas. Aren't those "deep pockets" currently paying contractors that the original developer wasn't?
Gotta recover some of that money somehow - agree that stiffing the condo buyers and setting the rack rate at $300 ain't the best way to do it, but don't think Deutsche is actually going to recover all the money they've sunk into this, let alone make a profit.