Urban village by Wynn may cost $4 billion - Sunday 12th of June 2005

Details are starting to slither out about developer Steve Wynn's concept for an urban village development on 135 acres of his Desert Inn site. Although no announcements have been made and no public data are available, a Wall Street source says the project, tentatively called Wynn Golf Course Redevelopment, will include 5,000 hotel rooms, cost at least $4 billion and open in 2010. That compares with 5,200 hotel rooms and 1,650 condominium units planned for MGM Mirage's $4.5 billion Project CityCenter, slated to open a year earlier.

Old-time casino hands say they're perplexed by the rush to judge if Wynn Las Vegas is a success. They say hotel-casinos are built to last anywhere from 20 years to 50 years, so it makes no sense to judge performance based on a month or a quarter. It'll make more sense to look at the first year, they say. As an example, look at Mandalay Bay. It is doing about $250 million in earnings before interest, depreciation, taxes and amortization, up a good 100 percent from 1999-2000, its opening year.Word is that MGM Mirage is rolling out a dynamite, companywide yield-management system to set room rates across all properties. Wall Streeters expect the system to show the power of the Mandalay Resort Group buyout.

Treasure Island is the first hotel-casino on the system, but it is being set up for all MGM Mirage properties. Also on the merger front, MGM Mirage is moving to take Mandalay casinos cashless, just as it has done with its own. Study is continuing, but it looks like a fait accompli. Venetian executives are nonplussed by the opening of Wynn Las Vegas, but confess a need to focus on their own shortcomings: the resort's pool area and its entertainment. They are wrapping up a $10 million pool-area improvement to hold onto day traffic.

And The Venetian honchos feel the Phantom (of the Opera) Theatre and the Blue Man Group Theatre should be enough to hold onto guests who are now wandering off at night for better entertainment. Still, developer Steve Wynn's problems with "Le Reve" show it's not as easy to start a new show as it looks.Gaming giant MGM Mirage is close to signing a $600 million syndicated loan to finance the $975 million hotel-casino it is building in Macau with Pansy Ho, Asian media report. The loan rate would be half a percentage point lower than Steve Wynn got last year for his $397 million loan from Deutsche Bank and Societe General. Both banks are lining up again for phase two of the Wynn project, bringing its total cost to more than $1 billion. In February, Las Vegas Sands Corp. upsized a $1.6 billion line of credit through Goldman Sachs and Scotia Capital at an undisclosed interest rate.

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