MGM Mirage Plans a 'City' on Vegas Strip

No longer content with operating gambling halls that merely resemble cities, casino superpower MGM Mirage, owner of New York New York hotel-casino in Las Vegas, has plans to build its own mini-city on the famed Strip.

This month, the company that also counts the Bellagio and the Mirage resorts among its many holdings announced plans for CityCenter, a $4.7 billion project that is to include a 4,000-room hotel-casino, three 400-room boutique hotels, 550,000 square feet of retail space, and more than 1,600 condo units of varying styles.

That's just for starters. In addition to this first development phase, scheduled to break ground in 18 months and for completion in 2010, even more condominiums could be built on the 66-acre parcel on the west side of Las Vegas Boulevard between the Bellagio to the north and Monte Carlo hotel-casino to the south. And when MGM Mirage completes a pending deal to swallow still another casino company, Mandalay Resort Group, the resulting mega-gaming company will wholly own the Monte Carlo along with another sizable tract of developable land nearby.

What is significant about CityCenter - even beyond its scope of initially assembling more than 6,800 guest and residential units in one complex with the prospect of adding hundreds, even thousands, later - is the fact that so much of it is designed to attract not merely tourists who are renting rooms for a few nights but owners wanting equity in the Strip.

"After 9/11, the hotel business in Las Vegas fell off," said MGM Mirage chairman and chief executive officer Terry Lanni. "But one thing that didn't stop was the 7,000 people a month who move here, in part because of the poor economy in California and also because of the booming nature of Nevada... and the cheaper cost of living." The bull market of buyers eager to own a piece of Las Vegas, even if they don't plan to live there year-round, already has been signaled by the success of high-rise projects on the greater Vegas Strip, such as Turnberry Place, a three-tower luxury condo development near the city's convention center, and another set of condo towers Turnberry Associates is building in conjunction with MGM Mirage near the MGM Grand hotel-casino.

Often, the luxury condominiums being built throughout Las Vegas are being bought as second homes, or by buyers who plan to share the expenses and occupancy among extended family members. But increasingly popular is a variation on the condo theme called condo-hotel units that are purchased for dual purposes, leisure and investment.

Condo-hotel living spaces resemble the typical apartment-style condominium with the exception that some interior elements, notably closets, are much smaller. While much roomier than typical hotel rooms or suites, the apartments are not designed as ideal year-round dwellings. Owners, often through a management company, rent their units to tourists for a substantial part of the year to offset mortgage, insurance and tax payments, and occasionally occupy them themselves. Under optimal conditions, the owners get occasional free vacation time plus long-term appreciation.

Buying in can be pricey, though. The newest condo-hotel units, being built behind the MGM Grand on the east side of the Strip, Lanni said, cost $1,000 a square foot, or $900,000 for a furnished 900-square-foot one-bedroom.

CityCenter advances the concept of living on the Strip, either full-time in traditional condos or part-time in condo-hotels, with its drift toward a self-contained metropolis. Living units in the initial phase will be built atop the large retail space. And along with the typical high-end merchandisers, Lanni says he anticipates a retail infrastructure to support CityCenter's residents.

"Say, a Dean & DeLuca [grocery] like you would find in New York... and a drugstore," he said.

While some might be put off by the cheek-to-jowl proximity of residential and retail, it has some advantages. "It's changing lifestyles," Lanni said. "As people live longer, they want the convenience of one-stop shopping." And in Las Vegas, that includes, as usual, the convenience of having a casino just steps away.

At CityCenter's core will be a towering casino-hotel - the destination point of a planned pedestrian promenade from the Strip - with retail and condos nearby, and the smaller non-casino hotels, to be operated by hoteliers not currently in Las Vegas, sprinkled to the north and south. Future plans could have more condos farther west.

The decidedly urban design of CityCenter, where buildings go up rather than spread out, is purposeful beyond architectural style and even the economics of bringing together a critical mass of consumers. That arid desert land along the Strip, once worthless, is now among the most expensive on the planet.

"When they sell land at $20 million an acre," Lanni said, "you have no choice but to go vertical."