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CHINA AND LAS VEGAS, Nevada -- Adding to its growing presence in the expanding Chinese tourism market, Las Vegas Sands Corp. signed an agreement with the city of Zhuhai to master plan a 1,300-acre parcel with nongaming attractions, such as resort villas, golf courses and a marina.
The destination, on Hengqin Island in the Guangdong Province city of Zhuhai, is expected to supplement the growing number of casinos in nearby Macau and the Las Vegas Sands' development on the neighboring Cotai Strip, where plans call for eight hotel-casinos, including the $1.8 billion Venetian Macau, which is under construction.
Hengqin Island is less than a mile from the Venetian Macau's location and short trip by water taxi to the main areas of Macau, where Las Vegas Sands operates the Sands Macau and where MGM Mirage and Wynn Resorts Ltd. are building hotel-casinos.
Signed during a ceremony late Friday at the Hong Kong-Guangdong Business Conference in San Francisco by company President Bill Weidner and Zhuhai Mayor Wang Shunsheng, the agreement calls for Las Vegas Sands to invest more than $1 billion over three phases, with the initial phase estimated at $300 million.
The company is not required to put up a large amount of money until definitive plans and contracts are agreed upon.
Weidner said the company will immediately begin master-planning the site to include a mix of leisure, tourism and convention amenities. Nongaming hotels, convention facilities, a marina and yacht club, an outdoor amphitheater, golf courses and tennis complexes are expected to be included.
Completion of the first phase of development on Hengqin Island is expected to coincide with the 2007 opening plans for the initial projects on the Cotai Strip.
"We see this as a unique opportunity to maximize our business potential and further broaden the appeal of the region as a multifaceted international convention and tourism hub and extended-stay vacation destination," Weidner said.
The Cotai Strip is an area of reclaimed land a few miles from the main stretch of Macau, which is between the islands of Taipa and Colane and bordered by the South China Sea. Las Vegas Sands has submitted plans for all eight Cotai sites, is expected to encompass 10,000 hotel rooms, as well as casinos, restaurants, convention and meeting facilities and entertainment venues.
Worldwide hotel chains, such as Starwood, Four Seasons, Marriott, and InterContinental, have agreed to build the hotels on Cotai, and Las Vegas Sands will operate the casino portions of the properties.
Hengqin Island is connected to Cotai by the Lotus Bridge and is connected to Zhuhai by the Zhuhai Bridge. The Guangdong Province is located in the southernmost part of China's mainland and is the most populous region in the country with 110 million residents.
Las Vegas Sands Chairman Sheldon Adelson said developing a nongaming destination adds to the area's tourism base by expanding the various amenities.
"The golf courses, tennis courts and marine-based activities are not only integral to the Hengqin Island development, but they serve as significant amenities to the Cotai Strip," Adelson said. "By providing unparalleled resort, recreation, and convention amenities, Macao and Zhuhai can reap the rewards of the same strategy that has made Las Vegas the world's top travel and tourism destination."
Added Adelson, "The strategic combination of noncasino tourism amenities located on Hengqin Island with the entertainment attractions of the Cotai Strip could create a tourism and convention destination unrivaled anywhere in the world."
Deutsche Bank gaming analyst Marc Falcone said the planned development on Hengqin Island shows Las Vegas Sands' confidence in the Chinese gaming and tourism market.
"The company believes they will have a very good return on investment in China," Falcone said. "I think there is a high level of synergy with this project and what is being built on the Cotai Strip."
Las Vegas Sands shares fell 39 cents, or 1.24 percent, Monday to close at $30.98 on the New York Stock Exchange.
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