MGM Mirage Steps Into the Fray Again, Partners With Abu Dhabi To Develop $3 Billion Resort

From Staff Reports

MGM Mirage (MGM) will partner with the Mubadala Development Co. to develop the MGM Grand Abu Dhabi resort.

This latest MGM-headed project is projected to cost $3 billion and will be owned by Mubadala, which is wholly owned by the government of Abu Dhabi. MGM Mirage will develop and manage the project for a fee. The property, aimed at the high-end market, will have "unparalleled views of the city skyline" and "stunning panoramic views of the waterfront," the companies said in a joint statement.

The project should open in 2012.

The 50-acre development on a waterfront site on Abu Dhabi Island will hold a non-gambling MGM Grand hotel, as well as two additional luxury hotels - giving it 1,200 luxury rooms. The MGM Grand Abu Dhabi also will feature an arena with up to 12,000 seats, restaurants and retail locations, high-dollar waterfront residences, private-yacht slips, and other entertainment-related facilities.

That 50-acre project is actually the first of three phases, and could create a project that ultimately covers 150 acres.

"We are thrilled that our first project with Mubadala will create a destination and icon for Abu Dhabi," MGM Chief Executive Officer Terry Lanni said when the project was announced.

The deal comes after Dubai World, a holding company for the Persian Gulf state, recently acquired a nearly 5% stake in MGM, and agreed to pony up $2.7 billion for a 50% stake in CityCenter, a 76-acre development in Las Vegas slated to open by 2009. Dubai World's private-equity arm, Istithmar, is also involved in a joint venture with MGM and Kerzner International Holdings Ltd. to develop a multibillion-dollar Las Vegas resort that also is slated to open in 2012.

The arena at the MGM Grand Abu Dhabi will likely host well-known performers from the Middle East region, as well as well-known Western acts that often appear at MGM Mirage's casino properties in Las Vegas - such as headline pop-music stars, and such as headline acts as Cirque du Soleil.

Sales of the luxury residential sites - apartments and villas - will help offset construction costs. That's just what's happening with the CityCenter project, where $3 billion of the $7.8 billion in construction costs are being offset by residential-property sales.

Abu Dhabi, the richest of the oil-laden United Arab Emirates, has a large expatriate population, and is aiming to transform itself into a global tourist destination.

Alcohol will be served throughout the complex, but some Las Vegas offerings, such as the Crazy Horse Paris topless revue at MGM Grand, will not be part of the plan.

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