A decade later, Harry Reid admits he ‘threatened’ banks to save MGM’s CityCenter project

A decade later, Harry Reid admits he ‘threatened’ banks to save MGM’s CityCenter project

  • Howard Stutz, CDC Gaming Reports
January 20, 2019 1:48 AM
  • Howard Stutz, CDC Gaming Reports
  • Other

It was a stunning revelation at the time, although his office downplayed it.

In 2009, during the heart of the recession, the story went, Senate Majority Leader Harry Reid reportedly called several financial institutions to help the then-MGM Mirage raise the roughly $1.2 billion needed to complete the massive – and financially troubled – CityCenter development on the Las Vegas Strip.

Turns out, it was more than just a few phone calls.

In an interview this month with Nevada Independent Editor Jon Ralston, Reid, 79, acknowledged he not only just called the leaders of many banks and financial firms, but he openly threatened them.

“No one in their right mind would have done what I did,” Reid told Ralston during a 90-minute interview. “No one would have done that.”

Reid, a Nevada Democrat then considered one of the most powerful politicians on Capitol Hill, told Ralston his deep friendship with the late billionaire developer Kirk Kerkorian, MGM’s founder and largest shareholder, was his reason for making the phone calls.

(Read part one of Ralston’s interview with Reid here and part two here in the Nevada Independent.)

MGM Mirage – now known as MGM Resorts International – was teetering on the edge of bankruptcy in 2009, as was CityCenter, the most ambitious development ever conceived on the Las Vegas Strip, with multiple hotels, high-rise residential, retail and other amenities. The project was scheduled to open in late 2009.

In 2007, Dubai World – the investment arm of Dubai in the United Arab Emirates – spent almost $6 billion for a 50 percent stake in CityCenter and 9.5 percent of MGM Mirage’s outstanding shares. Dubai World had paid $80 a share for its interest in MGM Mirage, but the company’s stock price had since fallen dramatically, and the company was threatening to pull out of the development.

“Now, I have a love affair with Kirk Kerkorian going back a long, long time,” Reid told Ralston. “So, part of it was because I had such admiration for him. But what I did there, I called presidents of banks, threatened them any way I could. I called the emir of Dubai or whatever the hell it was.”

Reid’s spokesman at the time downplayed the senator’s involvement, which was first reported in the Las Vegas Review-Journal, saying that Reid had “simply been asking banks to take a fair look at MGM’s CityCenter project to ensure that sound banking analysis is driving credit decisions, not irrational temerity over what is sometimes portrayed as a controversial industry.”

CityCenter was expected to boost the Las Vegas Strip’s job base and add to the economy.

“At a time when the state’s unemployment rate is higher than 10 percent, it makes sense that Sen. Reid would take appropriate steps to try to help Nevada’s biggest employer complete the state’s biggest new project,” the spokesman said.

Reid was long considered by Washington D.C. insiders to be the gaming industry’s leading advocate in Congress. In 2010, during Reid’s re-election campaign, several advertisements were aired touting how the senator “saved CityCenter.”

That wasn’t the only revelation about Reid’s connections to the gaming industry in Ralston’s interview.

Reid was chairman of the Nevada Gaming Commission in the late 1970s when the mob controlled much of the Strip. He was accused of being in the pocket of mob bosses, had a public run-in with organized crime associate Frank “Lefty” Rosenthal, and had a bomb planted in his car. Reid told Ralston he offered his resignation to then-Governor Mike O’Callaghan, Reid’s longtime mentor.

“That was hard. That was the hardest thing I did in my life. It was so difficult,” Reid recalled. “I went to O’Callaghan and I said, ‘Mike, I can’t take this. This is too hard on my family…’ He said, ‘If you decide to drop this, it’ll be the biggest mistake you ever made in your life. You’ll regret it for the rest of your life.’ So I hung in there…”

Reid used the commission chairmanship to win election to Congress in 1982 and the U.S. Senate four years later.

Reid, who retired from the Senate in 2016, has been undergoing treatment for pancreatic cancer.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.