Riding high, MGM Resorts eager to devote some TLC to its Las Vegas properties
10 January 2013
MGM Resorts International is off to a flying start in 2013, filling all its hotel rooms for the International Consumer Electronics Show, anticipating a big burst of activity for the Year of the Snake and nailing down plans to put a half-billion dollars in improvements into its Las Vegas properties.
And, on top of that, executives learned early Wednesday that they had cleared another hurdle in the process to build a second resort in the world’s most lucrative gaming market, Macau.
MGM Resorts CEO Jim Murren gave a mini-state of the company address to the state Gaming Control Board on Wednesday, telling regulators that improvements to Las Vegas properties are high on the company’s to-do list this year.
Murren appeared before regulators in a routine administrative cleanup of pending licensing matters. Because licensing applications can take months to process and company plans change rapidly, executives routinely request applications to be withdrawn and the three-member Control Board must formally vote to withdraw them.
In Murren’s case, suitability investigations for him as a director or manager of some companies that no longer exist needed to be removed. The board also withdrew a licensing request for former MGM President Terry Lanni, who died in 2011.
Regulators often take advantage of an executive’s appearance before the board to receive updates on business.
Murren said the company’s actions last year to refinance debt saved $237 million and the company is opting to reinvest that and more than $250 million more into Las Vegas.
“We finished the year on a high note in 2012, both operationally and financially,” Murren told the board.
Murren said MGM hotels were filled to capacity for the New Year’s Eve holiday and during CES, the city’s largest convention of the year, which runs through Friday.
He said bookings are strong for Chinese New Year, which this year begins Feb. 10, one week after the Super Bowl and celebrates the Year of the Snake.
Meanwhile in China, the news for MGM was good earlier in the day when the company received word that it had completed a 25-year lease agreement on 18 acres on Macau’s Cotai Strip for a $2.5 billion resort that would have 1,600 hotel rooms, 500 table games and 2,500 slot machines.
MGM is a 51 percent owner of MGM China, which is developing the resort with Chinese partner Pansy Ho. MGM already operates a 35-story, 600-room property on Macau’s mainland peninsula near the Wynn Macau and Encore at Wynn Macau.
Wynn also is building a new resort on the Cotai Strip, which is destined to become the top casino area in the dominant gaming market in the world.
In addition to the Macau property, MGM is responding to requests for proposals to build resorts in Springfield, Mass., and at National Harbor in Maryland.
But the company’s big-ticket capital expenses in 2013 will be focused on MGM’s properties in Las Vegas and Detroit.
The company will refurbish rooms at Mandalay Bay, the MGM Grand, Bellagio, Monte Carlo, Circus Circus and the Mirage. MGM’s The Hotel adjacent to Mandalay Bay is being rebranded as a Delano property, and an $80 million restaurant, club and lounge known as Hakkasan is under way at the MGM Grand.
In addition, the company just opened a Cirque du Soleil show “Zarkana” at the Aria and is working on a Michael Jackson-themed Cirque show at Mandalay Bay.
Murren, the board and Lionel, Sawyer & Collins attorney Ellen Whittemore paid tribute to Lanni, the architect of MGM’s acquisition of Mirage Resorts, a major turning point for the company.
Lanni died of cancer at age 68.
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