Urban design has intrigued Mr. Murren since college. He majored in urban studies and art history and took a job as an equity analyst covering casinos only after he lost out on a fellowship to examine how "pocket parks" benefit cities. He was reluctant to take a job in Las Vegas, but his friend Glenn Schaeffer, the CFO at Circus Circus Enterprises, persuaded him that "you get to influence the shape of a future city the world will talk about." Mr. Murren says the idea for CityCenter began as a "clandestine intellectual enterprise." In February 2004, he and Bill Smith, MGM Mirage's design chief, drew a simple diagram of how to develop a 55-acre lot that the company owned next to the Bellagio casino. With land prices soaring, MGM Mirage and other casino companies were seeing themselves more as developers than as gambling-hall operators. Mr. Murren thought a dense mix of residential, office and hotel spaces would pay off. Some of the world's top architects were brought in. Helmut Jahn designed a pair of towers that lean into one another called Veer. Daniel Libeskind created a "retail district" with an undulating steel roof meant to evoke Nevada's mountains and desert flatlands. CityCenter's preliminary budget was $5 billion. The company projected that as soon as the complex opened, condo sales would bring in $2.7 billion in cash. Bruce Hiatt, a luxury real-estate agent in Las Vegas whose company sold about 25 units at CityCenter, says he recalls a line out the door when MGM Mirage opened its first sales pavilion at the Bellagio. "They thought the demand would always be there," he says, "even as the economy started to turn." In the fall 2007, at the height of the real-estate bubble, MGM Mirage negotiated to sell half of CityCenter to Dubai World for $2.47 billion. Dubai World also purchased $1.2 billion of MGM Mirage stock at a premium. By summer 2008, the Las Vegas casino business was slumping, but the price tag of CityCenter continued to soar, rising as high as $9.5 billion before being trimmed to $8.5 billion. At MGM Mirage, some hoped-for bank loans never materialized, and the company's revenue dwindled. Then, on March 23, Dubai World filed suit and refused to pay its monthly share of construction costs, accusing MGM Mirage of "excessively spending without regard to appropriate accountability." As the challenges mounted, MGM Mirage hired bankruptcy attorneys to prepare for a possible Chapter 11 filing. "We got hammered, and we were not set up to prepare for the economic tsunami," Mr. Murren says. Meanwhile, Mr. Murren negotiated with lenders and crafted a new deal with Dubai World, which agreed to drop its suit and resume funding CityCenter. But parts of the project were still reeling. Las Vegas's condo market had crashed, and many buyers who had eagerly plunked down money for multimillion-dollar condos were threatening to pull out. In the end, MGM Mirage agreed to cut the condo prices by about 30%, further eroding its potential for profits. Mr. Murren insists that those who focus on current economic conditions don't understand the project. "If you were thinking purely about cost, we would put linoleum here," he says. "You have to decide: Do you want to just build a Popsicle stick or something as gorgeous as this?"

— CEO who cares more about design than shareholders  

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