Issue 262
September 19 - September 25, 2005
Volume 5
page 1
 

This Issue

Gaming News

It's all about Project CityCenter: MGM Mirage reveals details today

Reno casino expected to unveil major expansion plan

Westward Ho to close

Trump trumped in casino property auction

DV8Poker.Com Joins Excapsa Poker Network

Show Time Deff Leppard appears at the Borgata.

Column Winner at Slots Gets Heat By John Robison.

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It's all about Project CityCenter: MGM Mirage reveals details today

As reported by the Las Vegas Review Journal

LAS VEGAS, Nevada - MGM Mirage holds 832 acres of land on the Strip, but the company's focus these days centers on 66 acres it owns between Bellagio and the Monte Carlo.

Today, MGM Mirage executives will unveil details on the progress of Project CityCenter, a $5 billion urban core that MGM Mirage Chairman Terry Lanni said is the largest and most expensive private development under way in the United States. CityCenter will cover an area bigger than New York's Rockefeller Center, Times Square and SoHo combined, Lanni said.

On the drawing board are a 60-story, 4,000-room hotel-casino and 500,000 square feet of retail space. In addition, two nongaming boutique hotels, including a five-star property, will have 400 rooms each. The development is also slated to include two 500-unit condominium high-rises in a rental pool similar to the company's Residences at MGM Grand. Both boutique hotels will have about 200 condominiums each, and 140 condominiums will be incorporated into the retail district as lofts, brownstones or other attached-housing styles.

MGM Mirage, which is about halfway through a 20-month design process for CityCenter, has not established designs, prices or a beginning sales date for the condominiums.

MGM Mirage will also announce this morning the roster of architects working on CityCenter. They include Connecticut-based Cesar Pelli and Associates, which designed the world's tallest buildings, Malaysia's Petronas Towers. Cesar Pelli is the lead architect on the 4,000-room hotel-casino.

Rafael Violy Architects of New York, which designed Philadelphia's Kimmel Center, will create plans for the condominium-hotel towers.

Kohn Pedersen Fox Associates of New York and Adam Tihany, who designed Mandalay Bay's Aureole and The Mirage's Cravings, will design the five-star hotel.

Sir Norman Foster, a London designer who has won architecture's renowned Pritzker Prize, will design the exterior of the second boutique hotel.

Amsterdam-based Gensler is the executive architecture firm overseeing design of CityCenter, and Perini Corp. will be the general contractor.

The Light Group, which operates the Light nightclub and Fix restaurant at Bellagio, will operate one of the boutique hotels. Lanni said MGM Mirage will soon announce the five-star hotel operator. The company is also working with several architects on possible designs for the retail space.

Lanni said CityCenter is a necessary new direction for development on the Strip.

"There's not a city in the United States that is ahead of Las Vegas in the quality of dining, the quality of accommodations and the quality of entertainment," Lanni said. "What doesn't exist on the Strip is permanent residences. (CityCenter) brings in that living component. It creates a new core, a center for Las Vegas."

Andrew Zarnett, a gaming analyst with Deutsche Bank, said CityCenter will redefine MGM Mirage and the Strip."This is going to be the center of the new vertical development of Las Vegas on and off the Strip," Zarnett said. "Clearly, it will be the lion's share of MGM growth over the course of the next decade or many more years."

Hal Rothman, a professor of history at the University of Nevada, Las Vegas, said CityCenter could also reshape the demographics of the Strip. While most resort destinations have more condominiums and timeshares than hotel rooms, Las Vegas has always been a "room destination," Rothman said. That will change when CityCenter opens in late 2009.

"CityCenter has kicked off a revolution in property development here that will give the market a reasonable share of privately owned properties," Rothman said. "The question becomes, Will people live in them? I don't know if anyone knows the answer to that yet."

It's an important question, Rothman said, because visitors who spend $250 a night to stay in the Strip's upscale resorts could decide to buy a Strip vacation home instead. If buyers rent their condos out, that could skim market share from hotels, compelling resort operators in turn to look for new visitor markets.

But Lanni said CityCenter will add amenities to an area that is relatively under-served in sectors such as retail, thus boosting area properties such as the Aladdin and the nascent Harmon Avenue Corridor east of the Strip, where the Related Cos. and Starwood Hotels and Resorts are planning big projects.

"If we were merely building (room) capacity without excitement or a spectacular approach, that would really burden the marketplace," Lanni said. "CityCenter will be a new paradigm for decades to come. It will give people more to do and make other nearby properties more valuable."

Lanni said 350 of the company's 832 Strip acres are undeveloped or underdeveloped, and that translates into the potential for additional development. Future phases of CityCenter could involve residential development on land behind the Monte Carlo and New York-New York, which MGM Mirage acquired when it bought Mandalay Resort Group in April.

"The most important thing to understand about (MGM's) acquisition of Mandalay Bay is that MGM decided to hitch its star to Las Vegas," Rothman said. "At this point, we have a homegrown company dominant in the city and, to a large degree, in the industry. CityCenter further commits MGM to Las Vegas. At the same time, it further commits Las Vegas to MGM."

Gaming Wire writer Rod Smith contributed to this report.


Reno casino expected to unveil major expansion plan
As reported by the Associated Press

RENO, Nevada - The Peppermill hotel-casino intends this week to announce a $230 million expansion, including a new hotel, convention space and larger gambling floor, a newspaper reported Sunday.

"We're excited to be hosting a press conference on Thursday to announce a $230 million expansion," Peppermill spokeswoman Kim Stoll told the Reno Gazette-Journal. "At that time, all of the facts and artist renderings will be presented."

The south Reno casino sent news conference invitations to various city officials and community leaders, who confirmed receiving them Friday.

"They already have all the entitlements, so they're just ready to go," Reno Councilwoman Sharon Zadra said.
In 1999, Peppermill officials announced their intent to spend $230 million on a 632-room hotel addition, a casino and retail expansion, new parking garage and added convention space.

Permits taken out with the city at the time allow those components, as well as further hotel and parking expansions.

That year, the hotel-casino spent $65 million to renovate and enlarge many of its facilities, including using space in the closed Century Theaters next door.

"The entitlements that they received back then are still valid," Zadra said. "It is more than we typically see on an expansion. It is a pretty big deal."

Las Vegas-based Station Casinos Inc. has announced plans for two south Reno hotel-casinos. The Peppermill's expansion could be a shrewd move to head off competition, one expert said.

"Peppermill, by jumping into this, could be an attempt to pre-empt Station's interest in the market," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

The expansion is a positive sign for the region, which has seen annual gambling revenue drop about 12 percent since 2000 as tourism has waned, Eadington said.

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