LOS ANGELES, March 24 (Reuters) - Deutsche Bank AG (DBKGn.DE), the senior lender to the partially built Cosmopolitan Resort & Casino in Las Vegas, has commenced foreclosure proceedings, but the project’s developer said he believes the project can be recapitalized.
“We view this action as a means for Deutsche Bank to expand their ability to engage a greater number of serious potential investors in The Cosmopolitan,” Ian Bruce Eichner, chief executive of property developer 3700 Associates LLC, said in a statement on Monday.
The Cosmopolitan is located on the Las Vegas Strip between MGM Mirage’s_(MGM.N) Bellagio Resort and its $8 billion CityCenter project, which is slated to open in 2010.
Eichner said Deutsche Bank began foreclosure proceedings in order to protect its interest in the project, which he said is expected to completed on time in 2009.
“We remain optimistic there will be a successful resolution to the situation,” Eichner said.
Deutsche Bank in mid-January delivered a notice of default on a $760 million construction loan for the condominium-hotel project, which has seen costs climb while the U.S. credit markets have collapsed.
General contractor Perini Building Co., a unit of Perini Corp PCR.N, reached an agreement in January under which the bank has continued to fund construction work.
Eichner said there are no plans to alter that agreement.
Deutsche Bank declined to comment on the status of talks with potential investors, including Global Hyatt Corp. and Marathon Asset Management, which have also loaned money to the project.
A spokesman for Marathon said on Monday that talks with Deutsche Bank are continuing. Hyatt officials did not return calls.
Meanwhile, the Wall Street Journal reported over the weekend that New York property developer Related Companies has teamed with hotel operator Starwood Hotels & Resorts Worldwide Inc’s HOT.N W Hotel group and an unidentified casino operator to try to take over the $3.9 billion Cosmopolitan project.
Related Companies declined to comment on the report. W Hotels spokeswoman Jenni Benzaquen said, “We don’t have anything going on in Las Vegas right now.” (Reporting by Deena Beasley, editing by Leslie Gevirtz)