Dubai World gets piece of Vegas Strip

September 18, 2007 4:28 AM
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Dubai World is taking a stake in more casino projects on the Las Vegas Strip with partner MGM Mirage Inc., the companies announced last week.

A subsidiary of Dubai World’s investment arm, Istithmar Hotels FZE, will take a 25 per cent stake in a joint venture to develop a multibillion-dollar resort on the Strip, a project MGM revealed in June with Kerzner International Holdings.

Kerzner is to lead the planning of the project at the corner of Sahara Avenue and the Las Vegas Strip.

Construction is to begin in the first half of 2009 and the property is expected to open in 2012, said Kerzner International’s chief executive, Sol Kerzner, in a statement.

"We are excited to be partnering with MGM and Istithmar to create one of the most exciting integrated resort destinations in the world on the Las Vegas Strip," Kerzner said. "I expect that construction will commence in the first half of 2009 and that we will open in 2012."

Under the terms of the agreement, MGM Mirage will provide the land for the resort and Kerzner and Istithmar will provide cash equity. MGM Mirage, Kerzner and Istithmar will own 50 percent, 25 percent, and 25 percent, respectively of the newly formed joint venture.

The land being contributed by MGM Mirage is being valued at $20 million per acre. The new integrated resort complex is anticipated to be a multi-billion dollar multi-use project.

The new resort will be designed for approximately 40 of the 78 acres of land owned by MGM Mirage. Kerzner will lead the planning and conceptualization of this project. The joint venture is expected to draw upon MGM Mirage’s experience in Las Vegas and Kerzner’s experience in developing successful destination resorts.

"This is the first step in creating a truly unique destination on one of our premier sites on the Las Vegas Strip," said Terry Lanni, Chairman and CEO of MGM Mirage. "Our combined unmatched development and operating experience will create a major entertainment resort property which will further drive incremental visitors to the Las Vegas Strip. We look forward to working with these two highly respected international partners."

Sultan Ahmed Bin Sulayem, Chairman of Dubai World said, "This announcement today brings together three companies known for their ability to elevate and change the face of global hospitality and destination tourism. MGM and Kerzner share our vision in creating signature properties that will appeal to the global consumer and create value for generations to come. The Las Vegas market is one which we firmly believe will continue to expand and attract visitors from around the world. We are proud to be partnering with these fine organizations led by Sol and Terry."