The Death of Development, Part II

The Death of Development, Part II

Dubai master-developer Nakheel, which aimed for the stars with iconic projects, prepares for a dramatic restructuring, reports Trends. Part II.

January 13, 2010 4:01 by Edmund Sheen

Click here to read Part I.

“Everyone talks about the Atlantis party. What about the extravagant Trump parties – in New York and Los Angeles – on which they spent around $5.5 million each, without any sales or marketing objectives attached to them?” he asks.

According to him, the company paid several celebrities between $200,000 and $300,000 each for showing up for just three hours and Donald Trump did not contribute anything to this.

This extravagance continued even when it was clear an industry turnaround was imminent. Those familiar with the transactions say that the charity of the aging Hollywood celebrity Michael Douglas and his wife Catherine Zeta Jones got $7 million. Nakheel paid the two celebrities another $100,000 a night to show up in Dubai.

“It’s OK to pay a charity, but doing that when a turnaround is inevitable and paying them separately for a public relations exercise is ridiculous,” the source says.

A huge amount of money – some $13.6 million according to one estimate – was spent on the Tourism Development & Investment Market event in January 2008. Nakheel occupied 800 square meters of space in a business-to-business event where hardly anyone showed up.

“From a marketing perspective I can see hundreds of millions that could have been saved, besides cutting down on $40 million that was spent on outdoor advertising,” says a TRENDS source.

The justification behind some of that spending is that the events were planned months ago, before mid-summer last year when the financial crisis really kicked in. However, those who were in the organization at the time vehemently disagree.

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