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Gaming Guru

Jennifer Robison
 

The CityCenter of Attention

27 June 2006

As Bill McBeath sees it, the last thing Las Vegas needs is another hotel-casino.

And on Monday, McBeath, president and chief operating officer of MGM Mirage's Bellagio, showed media and gaming-industry watchers just how far beyond the traditional Strip-resort concept his company is going with its $7 billion Project CityCenter.

Standing over a model of Project CityCenter inside an office on the construction site, McBeath pointed out the 66-acre development's variety of components: In the back, up against Frank Sinatra Drive, a 60-story, 4,000-room hotel-casino with a curved, contemporary design will dominate the project's skyline. An ebony condominium-hotel tower with 1,543 units will flank the hotel.

Toward Project CityCenter's Strip frontage, two nongaming boutique hotels operated by the Light Group and Mandarin Oriental will provide 400 rooms each.

At Project CityCenter's heart will be 500,000 square feet of retail and two glass-condominium towers with a total of 810 lofts.

This past weekend, MGM Mirage began pouring the foundation of Project CityCenter, the largest private development under construction in the United States.

When it opens at the Strip and Harmon Avenue in 2009, Project CityCenter will create 12,000 full-time positions -- the biggest single injection of jobs into the market in Las Vegas history.

"(Project CityCenter) is a paradigm shift in design that creates a powerful urban experience," McBeath said. "It will have a plethora of entertainment, retail, food and beverage and gaming operations in one integrated campus. It really is paradigm-shifting in its scale, concept and financial cost."

Local gaming and real estate experts on hand to view the model agreed that Project CityCenter will alter the course of development and tourism in Las Vegas.

David Atwell, a land broker who helps developers buy and sell property on and around the Strip, said Project CityCenter would "ratchet up" foreign-visitor volume in Las Vegas. With a multitude of renowned designers including Studio Daniel Libeskind, Pelli Clarke Pelli Architects, Murphy/Jahn Architects, the Rockwell Group, Foster and Partners, Rafael Viñoly Architects, Gensler and Kohn Pedersen Fox, the property will have a sophistication that appeals to international travelers, Atwell said.

Plus, the Mandarin Oriental brand, well-known overseas, would also lure guests from other nations, said Richard Lee, a real estate analyst for First American Title Co.

Lee said Project CityCenter is a harbinger of Strip projects to come.

"This is the catalyst for our next wave of development," Lee said. "Over the next 15 years, all new projects will have different, unique elements and mixed-use profit centers."

Steve Bottfeld, a real estate analyst with Marketing Solutions, said Project CityCenter reflects increasing interest in creating pedestrian-friendly communities that mix residential and commercial uses.

"We used to say a home needed an entertainment center," Bottfeld said. "Now, homes need to be in the center of entertainment. The ordinary, efficient (hotel-casino) design needs to be replaced by an experiential design that makes the living experience more desirable."

Land prices are partly behind the move toward mixed-use development, said Brian Gordon, a partner in the consulting firm Applied Analysis.

"Real estate values have escalated so rapidly that property owners are driven to increase density and stretch the bounds of the imagination," Gordon said. "(Landowners) have to maximize the underlying value of the real estate."

Experts said cancellations of other planned luxury high-rises and mixed-use projects in the area, such as Icon and Las Ramblas, were not indicators of whether the Las Vegas market could absorb Project CityCenter.

"We're in an unusual time in terms of luxury condominium development," Gordon said. "However, the proposed Project CityCenter is unlike anything we've ever seen. I think the project's scope generates the critical mass that consumers as well as investors are going to be looking for. There's probably no other property with that kind of location sitting vacant today, so (MGM Mirage) has a tremendous opportunity in front of them. It's an ambitious project, but we're talking about a very forward-thinking gaming and development company."

Still unknown is the effect Project CityCenter will have on traffic and surrounding infrastructure.

MGM Mirage spokesman Gordon Absher said traffic-impact studies were continuing, and he had no details on how many additional car trips Project CityCenter would generate in the resort corridor.

But Absher noted the developer has struck a "precedent-setting" development agreement with Clark County that asks the gaming company to address infrastructure needs far beyond Project CityCenter's boundaries.

Absher said MGM Mirage would pay to improve the intersection of Harmon and Valley View Boulevard to handle increased traffic resulting from Project CityCenter.

In addition, Harmon will become an Interstate 15 fly-over, much like the Desert Inn Arterial, with an off-ramp at Project CityCenter. Traffic design will funnel employees, tour buses and service deliveries into the property via Frank Sinatra Drive rather than the Strip, Absher said. And seven valet drop-offs will spread traffic among multiple entry points.

Project CityCenter will also be the first resort on the Strip to have a fire station on-site. MGM Mirage will donate land just off Harmon behind the hotel-casino for a fire station; the company will buy the station's equipment and pay the salaries of its firefighters. MGM Mirage is also paying for additional fire inspectors at the county to handle the sheer volume of safety checks Project CityCenter will require.

"We understand our footprint on the community is going to be significant," Absher said. "We're willing to negotiate with the county to mitigate that impact. We know people are concerned (about traffic). We share their concerns, as does the county. We're looking for ways to ease the flow."