MGM Mirage to Build on Strip

Gambling giant MGM Mirage intends to build a new 4,000-room mega-resort and sprawling urban development in the heart of the Las Vegas Strip, a project that would dramatically change the landscape of the city’s most important commercial center.

MGM Mirage executives are calling the ambitious plan “Project CityCenter,” and they believe it will help transform Las Vegas into a sophisticated, multidimensional city, one that rivals other major metropolitan areas.

“Our master plan represents a significant new direction for our city and our company,” Terrence Lanni, MGM Mirage’s chairman and chief executive, said Wednesday.

The multibillion-dollar project includes three 400-room boutique hotels, about 550,000 square feet of retail shops, dining and entertainment venues, and a 1,650-unit luxury condominium complex.

The development will be built on a 66-acre site between the Bellagio and Monte Carlo hotel-casinos, with the first phase creating 12,000 jobs when it’s completed in 2010.

Over the next 18 months, MGM Mirage will pick a master architect and select residential and hotel partners.

Once completed, it could be the largest privately funded development in the country, said Jim Murren, MGM Mirage’s president and chief financial officer.

With the announcement, MGM Mirage has settled the question of where it will construct the company’s highly anticipated hotel-casino. It had debated putting the mega-resort in either Atlantic City or Las Vegas, which won for its unprecedented popularity, which has helped gambling companies reap dizzying profits since 2003. The number of visitors to the city is expected to top 37 million this year.

Gambling analysts were cautious about MGM Mirage’s announcement.

“It is somewhat outside the box for MGM,” said John Mulkey, a Bear Stearns Co. gambling analyst in New York. “They’ve been more active acquirers than developers in the past, but it certainly seems within the scope of their abilities to do something impressive with the land.”

Like the city, MGM Mirage should soon undergo some enormous changes.

Lanni has said the planned $4.8-billion merger with Mandalay Resort Group is on track for the first quarter of 2005.

The deal is awaiting government approval and would create the world’s second-biggest gambling company, a title currently held by Harrah’s Entertainment Inc.

The MGM Mirage plan is the third mega-resort in the works. Las Vegas Sands Inc. has started construction on the Palazzo, a $1.6-billion hotel-casino that is scheduled to open in 2007. It sits across the street from Wynn Las Vegas, Steve Wynn’s latest gambling temple that cost $2.7 billion and is slated to open April 28.

On Wednesday, MGM Mirage shares fell 78 cents to $58.92 on the New York Stock Exchange -- near the high end of their 52-week trading range of $34.05 to $60.07.