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SoHo in Vegas?
New Developments
Will Recast Sin City
By CHRISTINA BINKLEY
Staff Reporter of THE WALL STREET JOURNAL
November 10, 2004; Page B1
Two giant development projects, each of them conceived as a minicity
with homes, shopping and gambling, are set to change the face of Las
Vegas by the end of the decade.
MGM Mirage announced today that it will build a $4 billion "city" on the
Las Vegas Strip. The company says the massive development is the size of
New York's SoHo district, Times Square and Rockefeller Center combined.
At the same time, casino impresario Steve Wynn is planning to build a
huge resort development behind his latest casino project, Wynn Las
Vegas. According to the plans, described by several people familiar with
them, the project would entail as many as a dozen resort hotels
surrounding a vast lake that would be built behind the copper-colored
Wynn Las Vegas tower that now is rising.
"The goal is to create a pedestrian village where you walk, where
there's stores and shopping in a beautiful environment with no cars,"
Mr. Wynn said.
MGM Mirage's master-planned urban metropolis, approved by the casino
giant's board during a lengthy meeting yesterday, is being designed by
the same architects responsible for Battery Park City in New York and
the Baltimore Inner Harbor East. It will be the largest private
development under way, said Jim Murren, MGM Mirage's president and chief
financial officer.
"This is a fairly dramatic departure for Las Vegas and for our company,"
Mr. Murren said in an interview.
The development plans are set to take advantage of the recent
renaissance of Las Vegas, where casino profits and stock prices -- and
land values -- have been soaring. Boosted by the city's return-to-sin
mentality and the success of a global advertising campaign -- "What
happens in Las Vegas, stays in Las Vegas" -- people from all over the
world have been flocking to the city's nightclubs, shows and casinos.
Another catalyst for the development activity is the coming opening of
Wynn Las Vegas, which is set to debut in April. Given the previous
successes of Mr. Wynn's earlier casino resorts -- Bellagio, the Mirage,
and Treasure Island -- most Las Vegas casino operators expect Wynn Las
Vegas to be a tough and highly luxurious competitor.
All this activity has contributed to a wave of mergers and acquisitions
this year in the casino industry, which is centered in Las Vegas. MGM
Mirage in June cut a $4.8 billion deal to buy Mandalay Resort Group.
Following that deal, which is subject to regulatory approval, Harrah's
Entertainment Inc. agreed to make an even bigger acquisition -- to buy
Caesars Entertainment Inc. for $5.3 billion. That was followed by
several additional planned acquisitions, including Penn National Gaming
Inc.'s planned purchase of ArgosyGaming Co., announced last week.
When its acquisition of Mandalay Resort Group closes next year, MGM
Mirage will have several hundred more acres to develop nearby along the
Las Vegas Strip. Ultimately, MGM Mirage will oversee most of the
southern end of the Las Vegas Strip in what some people who are familiar
with the dense, urban plans are calling "Kerkorian City." MGM Mirage is
controlled by billionaire investor Kirk Kerkorian.
The working title for the MGM Mirage metropolis is "Project CityCenter."
The plans include a 4,000 room hotel and three smaller hotels. The
company has been talking with existing hoteliers that would manage those
smaller hotels. While no deals have been cut, the company is seeking
hotel brands that exist in Europe and Asia, places where Las Vegas is
competing heavily for high-rolling gamblers. Mr. Murren mentioned
Raffles, Peninsula and Cipriani as the type of hotel the company is
seeking.
There also will be 1,650 condominium and private residence club units
whose role will be to create a city-like 24-hour atmosphere. The 66-acre
development, designed by New York-based Ehrenkrantz, Eckstut & Kuhn
Architects, will sit next to Bellagio and the Monte Carlo casinos on
land that is owned by MGM Mirage.
It isn't clear yet exactly how MGM Mirage will pay for the project. But
Mr. Murren, who this week put together a $9.7 billion package of bank
debt that can be used for the Mandalay acquisition and other things,
said he thinks the company will be able to fund CityCenter "easily."
The CityCenter retail shopping area will be outdoors and "SoHo-type,"
Mr. Murren said, with streets designed for strolling as well as cars --
and no mall. Executives at MGM Mirage have been referring to this retail
area as "SoBella" for "South of Bellagio." "We're creating our own urban
environment," Mr. Murren said.
One goal of both MGM Mirage and Mr. Wynn is to prevent their customers
from leaving for rival properties. The idea is to build vast resorts
with dozens of restaurants, several shows and endless shopping.
Mr. Wynn's project would build out the 240-acre site where he is
building Wynn Las Vegas. The dozen or so resorts are to be built on the
$22 million Tom Fazio, Steve Wynn-designed golf course whose own
construction was completed just last week. "The whole thing would be
many waterfront resorts, not high-rise -- medium-rise," said Mr. Wynn in
a recent interview.
Several people familiar with Mr. Wynn's plans there said that project
would be built around a vast lake -- which could offer water skiing and
other entertainment -- with a boardwalk that would lead to the high-rise
hotels. There would be more shows and entertainment, as well as vacation
homes that probably would be sold as timeshares or other forms of
"fractional" real estate.
Unlike MGM Mirage's hotels, the elements of those resorts would be fully
owned by Wynn Resorts Ltd. "This is for my grandchildren," Mr. Wynn
said. The costs would be paid for with cash flows from Wynn Las Vegas
and bank debt. Construction isn't expected to start until 2008.
Write to Christina Binkley at [email protected]
New Developments
Will Recast Sin City
By CHRISTINA BINKLEY
Staff Reporter of THE WALL STREET JOURNAL
November 10, 2004; Page B1
Two giant development projects, each of them conceived as a minicity
with homes, shopping and gambling, are set to change the face of Las
Vegas by the end of the decade.
MGM Mirage announced today that it will build a $4 billion "city" on the
Las Vegas Strip. The company says the massive development is the size of
New York's SoHo district, Times Square and Rockefeller Center combined.
At the same time, casino impresario Steve Wynn is planning to build a
huge resort development behind his latest casino project, Wynn Las
Vegas. According to the plans, described by several people familiar with
them, the project would entail as many as a dozen resort hotels
surrounding a vast lake that would be built behind the copper-colored
Wynn Las Vegas tower that now is rising.
"The goal is to create a pedestrian village where you walk, where
there's stores and shopping in a beautiful environment with no cars,"
Mr. Wynn said.
MGM Mirage's master-planned urban metropolis, approved by the casino
giant's board during a lengthy meeting yesterday, is being designed by
the same architects responsible for Battery Park City in New York and
the Baltimore Inner Harbor East. It will be the largest private
development under way, said Jim Murren, MGM Mirage's president and chief
financial officer.
"This is a fairly dramatic departure for Las Vegas and for our company,"
Mr. Murren said in an interview.
The development plans are set to take advantage of the recent
renaissance of Las Vegas, where casino profits and stock prices -- and
land values -- have been soaring. Boosted by the city's return-to-sin
mentality and the success of a global advertising campaign -- "What
happens in Las Vegas, stays in Las Vegas" -- people from all over the
world have been flocking to the city's nightclubs, shows and casinos.
Another catalyst for the development activity is the coming opening of
Wynn Las Vegas, which is set to debut in April. Given the previous
successes of Mr. Wynn's earlier casino resorts -- Bellagio, the Mirage,
and Treasure Island -- most Las Vegas casino operators expect Wynn Las
Vegas to be a tough and highly luxurious competitor.
All this activity has contributed to a wave of mergers and acquisitions
this year in the casino industry, which is centered in Las Vegas. MGM
Mirage in June cut a $4.8 billion deal to buy Mandalay Resort Group.
Following that deal, which is subject to regulatory approval, Harrah's
Entertainment Inc. agreed to make an even bigger acquisition -- to buy
Caesars Entertainment Inc. for $5.3 billion. That was followed by
several additional planned acquisitions, including Penn National Gaming
Inc.'s planned purchase of ArgosyGaming Co., announced last week.
When its acquisition of Mandalay Resort Group closes next year, MGM
Mirage will have several hundred more acres to develop nearby along the
Las Vegas Strip. Ultimately, MGM Mirage will oversee most of the
southern end of the Las Vegas Strip in what some people who are familiar
with the dense, urban plans are calling "Kerkorian City." MGM Mirage is
controlled by billionaire investor Kirk Kerkorian.
The working title for the MGM Mirage metropolis is "Project CityCenter."
The plans include a 4,000 room hotel and three smaller hotels. The
company has been talking with existing hoteliers that would manage those
smaller hotels. While no deals have been cut, the company is seeking
hotel brands that exist in Europe and Asia, places where Las Vegas is
competing heavily for high-rolling gamblers. Mr. Murren mentioned
Raffles, Peninsula and Cipriani as the type of hotel the company is
seeking.
There also will be 1,650 condominium and private residence club units
whose role will be to create a city-like 24-hour atmosphere. The 66-acre
development, designed by New York-based Ehrenkrantz, Eckstut & Kuhn
Architects, will sit next to Bellagio and the Monte Carlo casinos on
land that is owned by MGM Mirage.
It isn't clear yet exactly how MGM Mirage will pay for the project. But
Mr. Murren, who this week put together a $9.7 billion package of bank
debt that can be used for the Mandalay acquisition and other things,
said he thinks the company will be able to fund CityCenter "easily."
The CityCenter retail shopping area will be outdoors and "SoHo-type,"
Mr. Murren said, with streets designed for strolling as well as cars --
and no mall. Executives at MGM Mirage have been referring to this retail
area as "SoBella" for "South of Bellagio." "We're creating our own urban
environment," Mr. Murren said.
One goal of both MGM Mirage and Mr. Wynn is to prevent their customers
from leaving for rival properties. The idea is to build vast resorts
with dozens of restaurants, several shows and endless shopping.
Mr. Wynn's project would build out the 240-acre site where he is
building Wynn Las Vegas. The dozen or so resorts are to be built on the
$22 million Tom Fazio, Steve Wynn-designed golf course whose own
construction was completed just last week. "The whole thing would be
many waterfront resorts, not high-rise -- medium-rise," said Mr. Wynn in
a recent interview.
Several people familiar with Mr. Wynn's plans there said that project
would be built around a vast lake -- which could offer water skiing and
other entertainment -- with a boardwalk that would lead to the high-rise
hotels. There would be more shows and entertainment, as well as vacation
homes that probably would be sold as timeshares or other forms of
"fractional" real estate.
Unlike MGM Mirage's hotels, the elements of those resorts would be fully
owned by Wynn Resorts Ltd. "This is for my grandchildren," Mr. Wynn
said. The costs would be paid for with cash flows from Wynn Las Vegas
and bank debt. Construction isn't expected to start until 2008.
Write to Christina Binkley at [email protected]