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Howard Stutz

MGM Mirage secures more funds

2 September 2008

LAS VEGAS, Nevada -- MGM Mirage President Jim Murren said Friday the company has secured $2.3 billion of the remaining financing for its CityCenter project, leaving $700 million still to be funded.

However, Murren told Reuters News Service he was confident the final portions of the $9.2 billion CityCenter financing would be completed by the end of September.

In early August, MGM Mirage said it had secured $1.65 billion of the $3 billion needed. Credit markets dried up and Wall Street had expressed concern over the challenges MGM Mirage has faced in obtaining the remaining financing. During MGM Mirage's second-quarter earnings conference call on Aug. 5, Murren said he thought the financial community's worries were "overblown."

He said there were no delays in completing CityCenter, which is expected to open late next year. CityCenter has been called the most expensive private commercial development in U.S. history and includes six high-rise towers, a 4,000-room hotel-casino, residential condominiums, boutique hotels and a 500,000-square-foot retail, dining and entertainment complex.

Dubai World, the investment arm of the Persian Gulf state, is MGM Mirage's 50-50 joint venture partner in CityCenter.

Murren said MGM Mirage received a commitment this week for $300 million from China Construction Bank, which follows recent commitments for $150 million from three other banks and $100 million from a fifth bank.

While he expects to meet an end-of-September deadline to secure the financing, Murren said negotiations with banks have centered on "a spirited debate over pricing."

Shares of MGM Mirage rose $1.71, or 5.11 percent, in trading on the New York Stock Exchange to close at $35.19.

Also at CityCenter, MGM Mirage spokesman Alan Feldman said the company awarded a small portion of the project's construction to Tishman Construction Corp. The agreement calls for Tishman to oversee the building work at the Harmon Hotel, one of five boutique hotels and high-rise condominiums.

Feldman said the value of the contract was $250 million. Perini Construction is still the primary builder of the CityCenter site. He said the deal with Tishman served two purposes: It frees Perini to handle the bulk of the development and gives Tishman and its subcontractors some work.

Tishman was the construction manager for Boyd Gaming's $4.8 billion Echelon, where work was halted for at least a year. Tishman was overseeing about 800 workers at Echelon.

"This doesn't take anything away from Perini," Feldman said.

MGM Mirage secures more funds is republished from