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Best of Howard Stutz

Gaming Guru

Howard Stutz

Aria casino gets license approval

20 November 2009

LAS VEGAS, Nevada -- There was never any doubt Thursday whether Nevada gaming regulators would approve a casino license for the centerpiece resort inside the $8.5 billion CityCenter development.

However, all five members of the Nevada Gaming Commission said they had reviewed a 10-inch thick notebook of background information prepared by state gaming agents, as well as the transcript from last week's Gaming Control Board hearing into CityCenter. Only then did the panel vote unanimously to grant the Aria Resort a gaming license, allowing the 4,004-room hotel-casino to open as planned on Dec. 16.

"A project like this couldn't come at any better time for our community," commission member John Moran Jr. said before the vote.

Much of the more than two-hour hearing focused around the 67-acre CityCenter project and its impact on the Strip, where gaming revenues have plunged more than 12 percent this year because of the sagging economy.

MGM Mirage Chairman and Chief Executive Officer Jim Murren spent more than 40 minutes detailing the project's attributes and describing the steps the company took this year to relieve its financial issues. He also restated his often-repeated remarks that CityCenter will grow the market, not just for MGM Mirage's Strip resorts but also the competition.

"Failure is not an option for us," Murren said.

Aria has the only casino inside CityCenter, which includes boutique hotels, high-rise residential units and a 500,000-square-foot retail, dining and entertainment district.

Vdara, a 1,500-room nongaming hotel at CityCenter, opens Dec. 1. The Crystals retail center opens Dec. 3, followed by the Mandarin Oriental Hotel the next day.

CityCenter is owned under a 50-50 joint venture agreement between MGM Mirage and Dubai World, the investment arm of the Persian Gulf emirate.

Gaming Commission Chairman Pete Bernhard asked both Murren and Dubai World CEO Christopher O'Donnell how they resolved their differences following a near split in the spring.

Dubai World filed a surprise lawsuit against MGM Mirage in March, saying that CityCenter's construction had been mismanaged. The lawsuit nearly sent the project into bankruptcy, which would have halted the development. The parties were able to craft a new agreement a month later that kept CityCenter funded. Dubai World dropped the lawsuit.

"We were able to resolve our differences once we were able to sit down and discuss the matter," said Murren, who said the partnership with Dubai World is strong and operates in a similar manner to the company's other joint venture arrangements.

O'Donnell agreed with Murren's comments.

"It was like we were driving down a bumpy road in the dark with no streetlights," O'Donnell said. "But we were able to work through any issues."

Murren called Aria the most luxurious and technologically advanced hotel in the world, and said the resort will set the bar for room rates in Las Vegas.

Closing sales of high-rise luxury condominiums at CityCenter won't start until January.

Also, Murren said company officials will evaluate plans for CityCenter's Harmon Hotel next year. Work on the Harmon was halted after it ran into construction issues. The building, which had been planned for 47 stories, was topped off at 26 stories and the project's condominium component was canceled.

Murren said the building has been sealed, but it will cost at least $170 million to complete.

Gaming Commissioner Dr. Tony Alamo Jr. told Murren he thought CityCenter would succeed.

Alamo, a former member of the Nevada Athletic Commission, used a boxing analogy to describe MGM Mirage's challenging year, in which the company laid off 9,000 workers, sold Treasure Island and cut more than $800 million in annual costs to help avoid filing bankruptcy.

"This is a 12-round fight and you've been beat up for six rounds," Alamo said. "CityCenter is the seventh round and you're staging a comeback."