MGM Mirage assembled the acreage necessary to develop on the North Strip a project larger than its $7 billion Project CityCenter. While CityCenter sits on 66 acres, the company announced a $575 million land deal that will give it 100 contiguous acres stretching from Circus Circus to Sahara Avenue.

“This land assemblage creates a very interesting and exciting opportunity for our company to create an integrated resort complex on the north end of the Strip,” said MGM Mirage President and CFO Jim Murren.

The company will spend $444 million to purchase a vacant 25.8-acre lot owned by Sahara owner Gordon Gaming Corp. It will also spend $131 million for a 7.6 acre piece of land owned by Concord Wilshire Partners.

Both transactions are expected to close by May.

The land connects with Circus Circus, which the company acquired in 2005, and averaged about $17 million an acre.

“What’s exciting about this purchase is that it fully unlocks the value of the Circus Circus land,” Murren said.

The company plans to eliminate the RV park and low-rise motel at Circus Circus, freeing up an additional 44 acres.

Murren said the land could be used for a project similar to CityCenter—located between the Monte Carlo and Bellagio—with a mix of hotel-casinos, boutique hotels, high-rise residential and a retail, dining and entertainment district. The company, however, will seek partners to help finance the new development, Murren said.

“We had so much interest in CityCenter from so many different resources that we believe this development allows us to bring in new financial and strategic partners,” he said. “We have an opportunity to bring into the mix new ideas, new brands, new customer bases and new marketing approaches. There is such an increased level of interest to get into Las Vegas, that we believe entities will want to partner up with MGM Mirage. This will create an opportunity for our shareholders to monetize a fair amount of our real estate holdings.”

Murren said an enhanced Circus Circus would play an important role in the new development, and as such, would undergo an extensive renovation.

“We intend to do with Circus Circus what we’ve done with the rest of our properties,” Murren said. “We’re going to put some money into it and enhance and expand it over time. Circus Circus will be a gateway to our new development, similar to what Monte Carlo is to Project CityCenter.”

While Murren has no timetable for development, he said work could start before CityCenter is finished.

By Greg Jones

Greg Jones is managing editor of Casino Connection Nevada, as well as associate editor of Global Gaming Business magazine.

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