MGM MIRAGE Provides Update on Las Vegas Development Plans
09 Fevereiro 2006 - 12:00PM
PR Newswire (US)
Approves Design and Budget for Project CityCenter; Releases
Profitability Forecast for Current Residential Program at MGM Grand
Las Vegas LAS VEGAS, Feb. 9 /PRNewswire-FirstCall/ -- MGM MIRAGE
(NYSE:MGM) today announced that its Board of Directors has approved
the design and budget for Project CityCenter, the Company's
previously announced urban development project at the heart of the
Las Vegas Strip. Project CityCenter will feature approximately 2.3
million square feet of residential space; a 4,000-room luxury hotel
and casino; two 400-room, non-gaming boutique hotels; and over
470,000 square feet of retail, dining and entertainment space. The
approved design will further enhance the overall significance and
profitability of Project CityCenter, which is expected to provide
owners and visitors alike a truly unique experience. The overall
cost of Project CityCenter is estimated at approximately $7
billion, excluding preopening and land costs. After estimated
proceeds of $2.5 billion from the sale of residential units, the
Company believes that the net project cost will be approximately
$4.5 billion. Project CityCenter will be located on approximately
66 acres between Bellagio and Monte Carlo on the Las Vegas Strip,
and will be connected to these resorts via a state-of-the-art
people mover system. The Company expects to break ground in
mid-2006, and estimates that Project CityCenter will open in the
fourth quarter of 2009. The detailed design phase of the project is
still under way, and the budget, scope and timing of Project
CityCenter are subject to change. "The market for casino resorts
and vertical residential space in Las Vegas is very robust," said
Terry Lanni, Chairman and Chief Executive Officer of MGM MIRAGE.
"We believe the most important aspects of successful casino resorts
and residential and retail developments are embodied within Project
CityCenter: location, brand and amenities. Our Board and management
believe that Project CityCenter will be the catalyst for a new kind
of experience on the Las Vegas Strip, and forever change the way we
view Las Vegas." Jim Murren, President, CFO and Treasurer of MGM
MIRAGE noted, "Our financing plan for Project CityCenter calls for
significant residential proceeds to supplement our available
borrowing capacity and free cash flow to efficiently fund this
major development, while maintaining maximum flexibility for other
expansion initiatives. We also continue to explore potential
partnerships and other financing vehicles to ensure the most
efficient use of capital. We expect to earn cash flow returns in
the mid-teens on the net project cost, which is considerably above
our cost of capital." The Company, along with its partner Turnberry
Associates, is constructing The Signature at MGM Grand, three
576-unit towers which are designed as condo- hotels. Towers 1 and 2
are sold out, under construction, and are expected to be completed
in the second and fourth quarters of 2006, respectively. Tower 3 is
also under construction, with available units being nearly fully
sold out at prices significantly above the first two towers. The
Company believes that these sales and pricing trends will continue
with the residential offerings at Project CityCenter. Mr. Murren
added, "Our belief in the Las Vegas residential market has been
confirmed with the very strong sales at The Signature at MGM Grand,
where we expect to record our 50% share of that venture's profit on
Tower 1 in the second quarter and Tower 2 in the fourth quarter, at
approximately $45 million and $60 million, respectively. Our
estimated share of profits on Tower 3 is in excess of $100 million.
We see residential development as a long-term competitive advantage
for our Company, particularly given our substantial real estate
holdings on the Las Vegas Strip, and as a key component in future
resort developments." MGM MIRAGE (NYSE:MGM), one of the world's
leading and most respected hotel and gaming companies, owns and
operates 23 properties located in Nevada, Mississippi and Michigan,
and has investments in three other properties in Nevada, New Jersey
and Illinois. MGM MIRAGE has also announced plans to develop
Project CityCenter, a multi-billion dollar mixed-use urban
development project in the heart of Las Vegas, and has a 50 percent
interest in MGM Grand Macau, a hotel-casino resort currently under
construction in Macau S.A.R. MGM MIRAGE supports responsible gaming
and has implemented the American Gaming Association's Code of
Conduct for Responsible Gaming at its properties. MGM MIRAGE also
has been the recipient of numerous awards and recognitions for its
industry-leading Diversity Initiative and its community
philanthropy programs. For more information about MGM MIRAGE,
please visit the company's website at http://www.mgmmirage.com/.
Statements in this release which are not historical facts are
"forward looking" statements and "safe harbor statements" Under the
Private Securities Litigation Reform Act of 1995 that involve risks
and/or uncertainties, including risks and/or uncertainties as
described in the company's public filings with the Securities and
Exchange Commission. First Call Analyst: FCMN Contact:
ymonet@mgmmirage.com DATASOURCE: MGM MIRAGE CONTACT: James Murren,
President, Chief Financial Officer and Treasurer, +1-702-693-8877,
or Alan Feldman, Senior Vice President of Public Affairs,
+1-702-891-7147, both of MGM MIRAGE Web site:
http://www.mgmmirage.com/
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