A consortium composed of New York-based private equity firm York Capital, Australian billionaire James Packer and Texas developer Christopher Milam has abandoned a planned $5 billion (€3.2 billion) casino development in Las Vegas.
In a statement, the consortium blamed the financial turbulence caused by the credit crunch for the deal’s collapse. The project was to begin in one month’s time.
The project, which was to be part of Packer’s gaming empire Crown Group, was announced last year, and was to have consisted of a 5,000-room hotel on a 27.5 acre former water park along Sunset Strip. The tower was to be 1,064 feet tall, which would have made it the tallest building in Las Vegas.
Crown had announced a strategic review of the project in February. That review determined that the consortium should stop making payments to the site's owners and write off its investment. The group is estimated to have made $70 million in non-refundable payments toward the project.
Packer is the son of the late media entrepreneur Kerry Packer, and he is the second richest man in Australia.
The gaming sector has been discussed as one area that poses a short-term risk in light of a global economic slowdown, as it is very susceptible to a decrease in discretionary spending.