An Australian group that had planned to spend $5 billion building the tallest casino on the Las Vegas Strip is abandoning the project due to the global credit crunch, one of the developers said Wednesday.
Australian gambling firm Crown Ltd., which held a 37.5 percent stake in the LVTI joint venture with Texas developer Christopher Milam and private-equity firm York Capital Management LLC, said it will write off its investment in the project of around $42 million.
The decision won't come as a major surprise to the market. The 27-acre site, which was to include a 5,000-room hotel, was put up for sale in March amid pressure from the global credit squeeze.
The development was supposed to have included a 1,063-foot tower that would have been the tallest in Las Vegas and one of the tallest in the United States.
Crown, controlled by Australian billionaire James Packer, said in February that its Las Vegas partnership was undertaking a "strategic review" of the project.
"The recent upheavals in world credit markets has made it increasingly difficult for Crown and its partners to develop a commercially viable project on what remains an attractive location on the Las Vegas Strip," Crown Chief Executive Rowen Craigie said in a statement.
"Accordingly, we took the decision to stop making further payments to the vendors of the site and concentrate our focus on other areas of our business," Craigie said.
Crown and its partners didn't own the land outright but instead paid for an option to buy the site. The option was due to expire June 30.
Crown's share price fell more than 2 percent on the news, but recovered to finish local trading 0.19 percent higher.