Despite rumors to the contrary, one of Las Vegas’ biggest projects is alive and well.
Described as one of the most state-of-the-art live entertainment and sports venues around, the MSG Sphere has begun to take shape on its 18 acres situated across from its partner, The Venetian Resort.
The MSG Sphere at The Venetian, an 18,000-seat arena with a wraparound LED screen, has a price tag between $1.2 billion and $1.7 billion. The project, which will have nine levels and 875,000 square feet of interior space, is on track to open in 2021, according to company officials.
Madison Square Garden Company President Andrew Lustgarten predicts the venue will be the company’s busiest arena. The company’s list of venues includes Madison Square Garden, home of the NHL’s New York Rangers and NBA’s New York Knicks and Radio City Music Hall in midtown Manhattan.
“Our goal remains to open (the) Las Vegas venue during calendar 2021 and we are increasingly excited about the transformative nature of the MSG Sphere,” Lustgarten told analysts during a fourth-quarter earnings conference call last month.
Lustgarten described Las Vegas as one of the world’s top entertainment destinations. With 40 million visitors annually, many of whom are looking for new experiences, he said “we’re going to give it to them.”
“MSG Sphere will be an entirely new platform, unlike anything we’ve ever seen,” he added.
MSG noted that the project has reached several significant milestones over the past several months, including completing grading, mass excavation and drilling deep foundations. AECOM, the developer which was hired in June, has now begun to work on shallow foundations and installation of below grade infrastructure.
“We’ve also started building basement walls, and tar and elevator, cores and columns,” Lustgarten said.
The venue will be 360 feet tall and 516 feet wide and will connect to The Venetian and the Sands Expo and Convention Center via a pedestrian bridge. Both properties are owned by Las Vegas Sands Corp.
Las Vegas Sands contributed the site as part of its partnership with MSG.
In recent years, AECOM has built T-Mobile Arena in Las Vegas, Mercedes-Benz Stadium and State Farm Arena in Atlanta, and the USTA Billie Jean King National Tennis Center in Queens, NY.
According to MSG, the 17,500-seat sphere shaped building will have interior and exterior screens the size of three football fields and a state-of-the-art sound system.
With concerts, award shows along with select sporting events, Lustgarten said the company does not intend to just rely on traditional content to drive the venue’s utilization.
“We plan to take a page out of Christmas Spectacular playbook (at Radio City Music Hall) with a goal of creating original attractions that showcase the venue state-of-the-art technology and run multiple times a day … year-round,” he said. “We see this as a very compelling opportunity.”
The MSG Sphere is just one of the projects being built on the always-evolving Las Vegas Strip.
The 65,000-seat, $1.8 billion Allegiant Stadium will be home to the Las Vegas Raiders and is set to open in time for the 2020 NFL season. The Las Vegas Convention Center expansion will add 1.4 million square feet to its current 3.2 million square feet at a cost of $935.1 million, and the Caesars Forum conference center near the LINQ Promenade will cost $375 million.
Genting Group, a Malaysian-based company, is building the $4 billion Chinese-themed Resorts World Las Vegas, while The Drew Las Vegas is set to replace the stalled Fontainebleau project.
When asked about the revenue implications for MSG from its Sphere project, Lustgarten didn’t offer any specifics financial information, saying the company is creating an attraction that doesn’t exist, and they believe it is “going to create a whole new host of revenue.”
The company estimates the project will cost $1.2 billion while the general contractor AECOM put a $1.7 billion price tag on the venue.
The AECOM estimate was part of the company setting an incentive benchmark for establishing their general contractor fees.
Victoria Mink, MSG’s executive vice president and chief financial officer, admitted the incentive benchmark has “a lot of estimates and assumptions.”
At this point, Mink said, “We’re in the middle of the contractually mandated period over which we can negotiate this incentive benchmark.”
The $1.2 billion cost estimate was for MSG’s budgeting and forecasting purposes, while the $1.7 billion is based on an estimate from AECOM.
Mink said the contractor is incentivized to propose a higher cost estimate, but thinks the estimate is too high. She added that MSG was confident they’ll be successful in achieving significant cost reductions.
One way or another, the project is expected to be finished in 2021.