Kirvin Doak Communications
Friday, Nov. 13, 2009 | 12:38 p.m.
MGM Mirage’s massive CityCenter project cleared a major hurdle today as the state Gaming Control Board unanimously recommended licensing of the $8.5 billion development.
In a special meeting this morning, the three board members questioned Jim Murren, chairman and CEO of MGM Mirage and his team of executives, who discussed the development’s history, role and future, as well as representatives of their joint-venture partners, Dubai World.
The Control Board’s recommendation will next go to the five-member Nevada Gaming Commission, which will consider final approval in a special meeting Thursday afternoon.
Murren, Aria chief operating officer William McBeath and Aria President and CEO Bobby Baldwin gave a one-hour presentation before fielding questions from the regulators.
Once the questions were aired, the board took the vote, whose outcome was never in doubt.
Board Chairman Dennis Neilander said MGM Mirage officials have helped convince him that CityCenter would grow the visitor market.
“Las Vegas has a history of being inventive and sticking it out when times are tough,” Neilander said. “This is a unique project. The financing is different, the revenue flows are different. I hope this is the thing that gets Nevada on a smooth recovery track.”
Board member Randall Sayre said despite the stakes that were involved, MGM Mirage and Dubai World didn’t get a pass from regulatory scrutiny and they fulfilled their burden of proof. He, too, is optimistic about the fortunes of the project.
“This is a statement of global leadership from two partners willing to take risks in a difficult time,” he said. “This is a significant international project and I’m glad that it was built in Las Vegas.”
With that, after more than two hours, the unanimous vote was cast. Murren embraced his partners and congratulated them for their efforts.
There were few major issues aired in the presentation.
Sayre asked whether there were any plans to expand gaming to other parts of the CityCenter development. Baldwin said there are none, with Aria being the only suitable location on the site for gaming.
Regulators had few questions for representatives of Dubai World, except to get a better explanation of the flow of cash between MGM Mirage and the United Arab Emirates government-backed partner company. Dubai World and its officers already have been scrutinized and licensed by the state, but board members wanted more details on funds contributed to CityCenter by the company.
Murren told board members the philosophy of CityCenter is to make it transformative -– something that would raise the bar in Las Vegas. He also said it is designed to make an environmental statement with its LEED Gold certification and that it would be a platform for community involvement with art-rich public areas that would bring Las Vegans to the Strip.
He said MGM Mirage, as the state’s largest employer and taxpayer, takes its leadership responsibilities seriously and that he feels CityCenter and its affiliates’ 12,000 new employees would help the local job market.
Murren is bullish on what CityCenter could do for visitation in Las Vegas. He predicted more than 38 million people would visit Las Vegas next year and more than 40 million a year in the future.
“I believe that if CityCenter didn’t exist, (visitation) would be up slightly next year,” he said, referencing small economic upticks the community has started to see. “But it does exist, and we feel that 2.5 million more people will visit Las Vegas because of CityCenter.”
Historically, new property openings have led to increased visitation and in his presentation, McBeath said the most recent example of that was the opening of the Wynn Las Vegas and Encore developments.
Murren said he also based his estimate on advanced bookings the company is seeing for both rooms and conventions. He said the quality of the amenities and the attention to “green” development has resulted in some high-level corporations booking meetings at the property.
Neilander said he considered Murren’s estimates “somewhat optimistic, but reasonable considering the one-of-a-kind nature” of CityCenter.
Analysts have said Aria would produce cash flow of between $250 million and $350 million a year, but Murren said he thinks the figure could be higher.
He also is hopeful that CityCenter would jumpstart other development in Las Vegas, but he knows that would be difficult.
“It’s too expensive, too hard, money is too scarce to do what we’re doing here,” he said.
McBeath told board members a $20 million advertising and marketing program with spots on network and cable television will begin Sunday.
CityCenter will begin opening the doors of four components of the development next month.
First to open will be the Vdara, an all-suite, smoke-free, non-gaming hotel that is connected to MGM Mirage’s Bellagio.
The 57-story Vdara, which opens Dec. 1, has 1,495 suites ranging from 500 to 1,650 square feet. The property also has an 18,000-square-foot, two-level spa with 11 treatment rooms and three relaxation lounges.
Two days later, the development’s major retail and entertainment component, Crystals, will open.
The 500,000-square-foot center will have luxury retailers Louis Vuitton, Hermes, Prada, Christian Dior, Bulgari, Van Cleef & Arpels, Tiffany & Co., Mikimoto and Ermenegildo Zegna. Eva Longoria Parker’s Beso will be among the restaurants in the center. Others include Mastro’s Ocean Club and two new Wolfgang Puck restaurant concepts.
On Dec. 4, Mandarin Oriental will debut in the Las Vegas market with its 47-story non-gaming hotel with 392 rooms and suites and 227 residential units.
The Mandarin Oriental also will have a spa, a two-level, 27,000-square-foot area with 17 treatment rooms, including seven couple’s suites. The property also will have a restaurant on the 23rd floor, Twist by Pierre Gagnaire, a world-renowned, three-star Michelin chef.
The final piece for December is the one on which the Control Board focused on the most.
Aria, which opens Dec. 16, has a small casino by Las Vegas standards – 150,000 square feet. But it has new technologies making their Las Vegas debut and an abundance of natural light. High-end player will have exclusive salons with high-limit slots and table games. More than half of the casino floor will have server-based-gaming slots and none of the slots are on walls.
Board members were told that 2,600 cameras are installed to monitor areas in CityCenter and that the control center for the entire development would be house in Aria.
The 4,004 rooms include 568 suites with floor-to-ceiling windows. Company officials say as guests first enter, they will be “greeted” as curtains open, lights turn on and the TV displays a menu of preferences. Guests can wake up through controlled temperature, preferred music or TV channels and the opening of curtains. A “good-night" button turns everything off – from TV and music to lights – as the privacy notification turns on.
Aria also will house the new Cirque du Soleil show, “Viva Elvis.”
Other components of CityCenter – the Harmon hotel, which was delayed by construction flaws discovered in mid-development and reduced to 23 floors, and the two leaning Veer towers, a residential property – will open next year.