The mixed-use project right on the Strip is coming steadily off the ground as we speak. The construction site is full of activity and some of the buildings have already reached up to about 15 stories. It will include several hotels, 2,650 high-rise condominiums, a casino and a huge retail, dining and entertainment venue. The cost of this massive development is pegged at $7.9 billion and it's expected to open late in 2009.
MGM Mirage, the owner of the development, has decided at this stage to sell half of the project to Dubai World, a holding company for the state of Dubai. This is another joint venture for MGM Mirage, something that has lately become its preferred investment strategy. Dubai World is a high-end, well-financed entity that will help open the door for MGM Mirage to access international markets where it doesn't have a foothold yet. And compete abroad with Las Vegas Sands, the owner of the Venetian Resort and Casino and Venetian Macao, Harrahs Entertainment and Wynn Resorts, owner of Wynn Las Vegas and Wynn Macau.
The deal is estimated to put $3.9 billion in the company's bank account, a neat sum indeed. That will lower its risk factor on CityCenter and allow the casino operator to pursue more vigorously some of the other projects already sitting on the drawing board.
The latest trend in the casino development at least here in Vegas appears to shift toward mixed-use projects, like the CityCenter is. It makes perfect financial sense when you have luxury condominiums included in the mix. According to calculations, the CityCenter will balance out about $2.7 billion in construction expenses by the sales of its condo units. Huge advantage. And the residents from those on-site homes form a customer base you can easily tap into. Great business idea.