Tuesday, Dec. 8, 2009 | 2:06 p.m.
MGM Mirage Chairman and Chief Executive Officer Jim Murren this week said he isn’t crazy and neither was opening his company’s $8.5 billion CityCenter project in one of the worst economies Las Vegas has seen.
“We have to look back and look at how long it's taken to develop this, look at the money we've expended and look at it from a return on investment perspective,” Murren said during an interview Monday on “Face to Face With Jon Ralston.”
“It can't be over a year or two period of time,” Murren said. “It has to be over, in this economy, it has to be over a five- or 10-year period of time.”
MGM Mirage and joint-venture partner Dubai World opened three of CityCenter’s buildings last week, including the Vdara hotel and condo tower, luxury hotel Mandarin Oriental and the Crystals high-end retail mall. The 4,004-room Aria resort will open next week.
Murren said he knows locals – including himself – often don’t go to the Strip unless they are acting as a tour guide for family and friends. He said he believes CityCenter will be a different attraction.
“I’ve lived here for 11 years and I know people don’t go to the Strip unless friends are in town but they will come to CityCenter,” Murren said. “They will park, they’ll wander around, they’ll look at the art, they’ll look at the architecture. I believe this firmly, that people will be inspired.”
L.A. Weekly quoted Murren last week as saying he had never been inside newer luxury resorts on the Strip like the Encore or Palazzo. He said he’s never had a reason to.
“I live in Summerlin. I coach my kids. I have a lot of restaurants out there and if I didn’t work in the resort community I probably wouldn’t come down here [the Strip] much,” Murren said. “And that was my point. I really wouldn’t be upset if people that live here never visited Aria. I would be upset if people didn’t try to wander around CityCenter and enjoy the environment.”
After years of living in Las Vegas, Murren, a New York City transplant, said he felt a yearning for a more urban environment. That led him to help MGM Mirage develop its own urban metropolis, a city within a city comprised of residences, resorts, a shopping mall, public art and “pocket parks.”
While Las Vegas doesn’t have a downtown area like San Francisco or New York, Murren said he thought the company could create some elements of it.
“I long for some basic elements that I'm used to having, culturally, educationally, medically, infrastructure. I really believe that if we create something wonderful right on the Strip, tourists will come to it,” Murren told Ralston, who also writes a column for the Sun. “We're in the for-profit business. We need to make money on this, but it's also something for the community.”
Murren said several times during last week’s CityCenter openings that MGM Mirage’s intention never was to build “just another casino.”
“I don't think we needed another themed hotel-casino. I don't think anyone really believes that firmly. What do we need here? Do we need another arena? We have three. Do we need more shopping at a mall? No,” he said. “But, what we could use, what we do need is something to inspire people. I think the architecture will. I think the public spaces will.”
Six of CityCenter’s facilities -- Mandarin Oriental, Veer Towers, Vdara, Crystals, Aria’s convention center and theater, and hotel tower -- are LEED Gold certified. Murren said “green” facilities are one of the key items companies look for when booking conventions.
“There is a demographic of people who do care about the environment when they're booking their hotel rooms. I think it's a marketing position. That's not why we did it,” Murren said. “We did it because we're a leader in the community and leaders have to lead. I would be very disappointed if other buildings do not follow this standard going forward.”
MGM Mirage is also hoping to attract international customers with its apartment-like accommodations and the urban feel of CityCenter. The reason: International guests stay longer and spend more, Murren said.
Rates at Vdara will begin at $159 while rates at Aria will start at $179 during its opening next week. The lower rates will help get guests into the resorts during their debuts, Murren said.
Murren thanked Sens. Harry Reid and John Ensign for their roles in helping MGM Mirage secure the funding it needed when the company was on the brink of bankruptcy.
“Senators Reid and Ensign and our congresspeople made a lot of calls for me, particularly Senator Reid,” Murren told Ralston. “Senator Reid did not get the banks to lend me money, nor did Senator Ensign. But what they did do, which was critical, was get people to give us the time of day.”
Dubai World has been in the news recently for issues related to its own debt. Dubai World, which has about $60 billion in debt, said last month that it asked creditors if it could postpone forthcoming payments until at least May.
Whether Dubai World will be a partner in CityCenter years down the road, Murren said, is unknown.
“What I do know is all their money is in CityCenter. All our money is in. The project's fully funded,” Murren said. “I have a very good relationship with Dubai World right now. I do not know what the ownership of CityCenter will be next year or five years from now.”