Vegas’s newest high-stakes bet, the $8.5 billion CityCenter, has had a bumpy ride, with the deaths of six construction workers, a lawsuit between development partners over rising costs that was later dropped, and funding woes brought on by the global credit crisis. The Las Vegas Strip development began construction during the real estate boom but finished in a deep recession. As the economy went south, co-owners MGM Resorts International (formerly MGM Mirage) and Dubai’s Infinity World responded with cost cuts.

In early 2009, CityCenter reduced the 400-room Harmon Hotel tower, designed by Foster + Partners, to about half of its planned height. The move eliminated 200 condominiums, of which fewer than half had sold, trimming $600 million from the project price tag. Completion of the oval-shaped, glass-clad structure has since been delayed indefinitely, saving another $200 million in fit-out expenses. The building is part of a $490 million construction defect lawsuit with general contractor Perini Building Company that centers on improperly installed reinforcing steel.

MGM, meanwhile, discounted CityCenter condominium prices by 30 percent late last year and unveiled a home-buyer financing program. This has helped, somewhat. Through June, 234 CityCenter residences had closed, say officials. Yet that still accounts for less than 10 percent of the development’s 2,400 condo and condo-hotel units. “We will clearly have remaining inventory for some time,” says MGM spokesman Alan Feldman. “CityCenter, like all Las Vegas properties, has been affected by the larger picture in the U.S. economy.”

The company lost $96.7 million in the first quarter of 2010, partly due to an $86 million write-down of CityCenter residences, according to Securities and Exchange Commission filings. That compares with $105.2 million in net income for the same period last year. MGM is $13 billion in debt as of March 31, much of it from financing CityCenter.

The development’s 4,004-room centerpiece—Pelli Clarke Pelli’s Aria Resort & Casino—had occupancy rates of 63 percent, with an average daily room rate of $194, during the first quarter, according to SEC filings. By comparison, average citywide occupancy rates were 82.4 percent for the first three months of 2010, reports the Las Vegas Convention and Visitors Authority (LVCA). But average daily room rates citywide were only $93.23, says LVCA, or less than half the rate commanded at Aria.

The property’s retail offerings have also had a slow start. Crystals—Daniel Libeskind’s angular 500,000-square-foot shopping complex—opened in December with only a handful of tenants. However, the building is fully leased, with new stores moving in each month, says Feldman. At press time, it was approximately 70 percent occupied.

CityCenter, which reported a $255 million operating loss through March 31 to the SEC, has clearly suffered from poor timing. “In a normal economic environment,” says Grant Govertsen, principal of Las Vegas–based Union Gaming Group, a market research firm, “it probably would have been a home run and a massive driver for visitation to the city.”