Monday, May 14, 2012

A Night (Actually Three Nights) at the Cosmopolitan

After spending three nights at the Cosmopolitan Hotel, I have to say it is much different from any other hotel I have stayed at. We knew it was different from the time we checked in, where while checking in at the front desk we heard a group of young women chanting in the lobby. I've never felt so out of place at a hotel (though not uncomfortably so), as the clientele appears to be predominantly single twenty and thirtysomethings. Arriving on a Saturday evening, it seemed like we landed in the middle of one giant party. In the words of Mrs. Chandavkl, the hotel was swarming with women "wearing four inch heels in sparkling dresses that almost went up to the crotch." And I may add that many of them had no business wearing such short dresses.

The hotel room itself was also quite different. The most obvious thing was the width of the hotel room. There was probably a good ten to twelve feet of open space between the foot of the bed and the wall, clearly enough room to play flag football, or for a large number of sleeping bags. The reason is that the Cosmopolitan, like the Trump, was originally planned as a condominium project during the heyday of the Las Vegas residential building boom. I remember the early to mid-2000s when dozens of high rise condos were simultaneously being built or planned, and I thought to myself even as asking prices soared that there was no way that all of those units could be absorbed. I was right. Also, a particularly nice feature was the room clock, which isn't a clock or a digital clock, but a lighted screen showing the time, temperature and weather, room number and the guest's name, amother other information.

Interestingly, the land parcel on which the Cosmopolitan sits, a site of a mere 8 acres (compared to the Bellagio next door which sits on 120 acres), was purchased for only $5 million. While that sounds like a bargain price, in fact there had been little interest in developing that property. For those who remember how that area used to be, Harmon Ave. ended as a through street at the Strip. While the street continued on west of the Strip, it was only to provide access to a bunch of parking lots. Immediately east to the parking lots (just next to the Bellagio) is a timeshare called the Jockey Club. The Cosmopolitan lot had been leased to the Jockey Club for parking, and nobody thought about doing anything with that parcel because it was assumed that any development would have to be done with the approval of, if not in conjunction, with the Jockey Club. Since the Jockey Club has over a thousand timeshare owners around the world, any such cooperation would be impossible from a practical point of view.

Nevertheless, that did not stop the original developer of the Cosmopolitan from plunking down the money despite the prospect of a task that no major developer deemed worthy to try. His concept was simple--forget about the Jockey Club and build right up to their property line. In someplace like California such an approach wouldn't work. Heaven knows that the NIMBYs here would have stopped such a project in its tracks. However, in Las Vegas, the operative motto is "Show me the money." And when the developer showed Las Vegas the economic benefits of his project, any objection by the Jockey Club was brushed aside by both the city and the courts.

Now this is not to say that the original developer of the Cosmopolitan made a killing, as he went into bankruptcy, as did the second developer. Obviously the sagging real estate market was a factor, but there was also one additional problem. The Cosmopolitan lot sits on what might be described as an underground lake. Consequently, not only did the lake have to be pumped out, an expensive proposition, but it needs to be pumped out continuously. Indeed, there was surprise when the lender, Deutsche Bank, which eventually had to foreclose on the property, decided to complete construction (as opposed letting the framework sit, as with the Fontainbleu up the street).

Remarkably, the Cosmopolitan has become the hottest hotel in town. Though our group secured rooms at about $200 a night, I was curious what the going rate was for a basic hotel room. I discovered that the rate for Saturday night had been $600, and it was $400 the evening before. And according to a newspaper article I read, demand for rooms there is high and the hotel is often sold out at those rates. One might think that Deutsche Bank has turned the project into a success, but that's not really the case given that they've sunk $4 billion into the project. Also, while hotel, club and restaurant operations may be quite profitable on a current basis, the casino area clearly lacks pizzaz, as well as large numbers of gamblers.

And poor Jockey Club. It's been engulfed by the Cosmopolitan in front of it and the Bellagio next to it. The Cosmopolitan pretty much built up to the lot line, replacing the view of Las Vegas Blvd. with a view of the Cosmopolitan wall. The entrance to the Jockey Club on Las Vegas Blvd. is almost invisible, sharing a small driveway with the Cosmopolitan loading dock, though I guess nobody except timeshare owners would be looking for it. And while the Jockey Club now touts itself as being "snuggled" between the Cosmopolitan and the Bellagio, that's just a face saving spin to reflect that they took it in the shorts.

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