A huge undertaking

Business reporter Rick Velotta of the Las Vegas Sun is impressed with the magnitude of Project CityCenter. “It’s really amazing just seeing it on paper,” he says. “It’s actually pretty mind boggling. Any time you can put all those things together, it’s obviously a huge deal. It the biggest project on our horizon.” In addition to having a central large hotel casino project that will likely be run by MGM, there’s also going to be four boutique hotels, which are hotels with less than 500 rooms.

The Manhattan-value apartments that will make up the Project City Center Las Vegas likely will attract retired baby boomers seeking a low-maintenance lifestyle, celebrities, and the rich. “It’s a playground,” explains Velotta, referring to Vegas. “There is a huge demand here right now for high-rise condos, time shares, and second-home residents. People can also buy them as investment properties and rent them out for a week to convention-goers.”

Fielden does point out that the MGM Las Vegas plan requires additional considerations. “In terms of the project, there are, however, significant issues affecting the urban context and environment that must be addressed and resolved: clean-air, traffic congestion and noise, access to water and energy, issues of refuse, and other related infrastructure demands.”

Paying for the metropolitan center

MGM wants to develop Project CityCenter over time and expects to generate about $1 billion by pre-selling the residential properties. The remaining $3 billion of the first phase will be paid out of cash flow and leasing out the boutique hotels. The other $2 billion will be raised by banks or equity. In March, MGM merged with the Mandalay Resort Group to increase its cash flow. The Mandalay Resort Group owns five hotels on the Strip: Mandalay Bay, Circus Circus, Monte Carlo, Excalibur, and Luxor.

“We have strong expectations for the coming years,” predicts Terry Lanni, chairman and CEO of MGM MIRAGE. “We continue to make significant strides in our high-return development projects.” Lanni also believes MGM’s metropolis complements ongoing plans by the city to redevelop its downtown.

Adds Murren, "As real estate prices continue to soar on the Strip, we intend to maximize the economic value of this land by making this development the newest icon for Las Vegas, one that reflects a new attitude and contemporary perspective for this sophisticated city.”