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MGM plans mixed-use project

February 13, 2007|From Bloomberg News

MGM Mirage, the world's second-largest casino company, plans to develop a new community about 25 miles south of Las Vegas that will include a casino, hotel, stores and housing.

The development in Jean, Nev., is a joint venture with Jeanco Realty Development and will be built on 166 acres of mostly undeveloped land owned by MGM, the Las Vegas-based company said Monday. MGM will close the 302-room Nevada Landing Casino, one of two hotel-casinos it owns in Jean, by April 18 as part of the plan.

MGM became owner of Nevada Landing and the Gold Strike Hotel & Casino almost two years ago when it bought Mandalay Resort Group for $4.8 billion.

The agreement values the Jean assets at $150 million. They currently generate about $6 million in annual cash flow, MGM said. MGM and Jeanco are equal partners in the venture.

MGM and Jeanco don't yet know how much the development will cost or when it will be completed, MGM spokesman Alan Feldman said.

The companies haven't decided whether they will tear down Nevada Landing. The future of the Gold Strike, whose more than 800 rooms are being renovated, hasn't been decided either, Feldman said.

The development, planned for a site that straddles Interstate 15, isn't intended to compete with casinos on the Las Vegas Strip, Feldman said.

"Chances are people who are going to live in this area are going to work in Las Vegas," he said. "Tourists will play a role, but it's more likely to become a regional casino than a place that's going to compete with the Strip itself."

MGM shares fell $1.90 to $69.40.

MGM is the second-largest casino company by revenue, behind Harrah's Entertainment Inc., also based in Las Vegas.

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