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INSIDE GAMING: Singapore project to cost Sands more

4 September 2007

LAS VEGAS, Nevada -- A day after opening the $2.4 billion Venetian Macau in China, Las Vegas Sands Corp. officials said costs had risen on the company's Singapore project.

In an interview with Asian media attending the opening of the resort on Macau's Cotai Strip, Las Vegas Sands President Bill Weidner said construction costs on the Marina Bay Sands may rise some 20 percent to 40 percent above the original $3.6 billion budget by the time the hotel-casino is completed in 2009.

Higher construction costs, the price of sand, and design changes in the project are being blamed for the increase. In January, Indonesia banned the export of sand to Singapore, while stricter checks on barges also disrupted granite supplies.

"We're struggling, quite frankly, to stay within our budget," Weidner told a Singapore newspaper.

A 40 percent increase would add $1.4 billion to the cost of the planned 2,500-room hotel, which will have 1.2 million square feet of convention space, a 1 million square-foot retail center and three entertainment venues.

Revel Entertainment Group, which is backed by Morgan Stanley, said it would spend $2 billion on a hotel-casino complex in Atlantic City.

The 20-acre Boardwalk site is at the pathway's northern end next to the Showboat. The plans reportedly call for a 168,000-square-foot casino and two 48-story hotel towers each with 2,000 rooms. The project would open in 2011.

The Revel project is one of several potential developments in Atlantic City, including a resort complex by Pinnacle Entertainment on the site of the now-closed Sands.

"Despite the near term disruption from new supply in Pennsylvania, longer term operators remain interested in building in Atlantic City," Deutsche Bank gaming analyst Bill Lerner said in a note to investors.

Olympia Gaming, which has delayed its planned $1 billion Southern Highlands resort project because of the fluctuating bond market, plans to break ground early next year on the $800 million Legends Marina Resort in Sparks.

The Northern Nevada project will sit on 14 acres next to a 1.2 million-square-foot retail and entertainment center being built by Scottsdale, Ariz.-based RED Development.

Olympia spokes man D.C. Graham said the connection to another development in Sparks and the smaller scale of the hotel-casino allows the project to move forward. The Sparks resort is scheduled to open in 2010.

Financing options for Southern Highlands project will be visited quarterly and will move ahead when the markets are right, Graham said.

The Inside Gaming column is compiled by Review-Journal gaming and tourism writers Howard Stutz, Benjamin Spillman and Arnold M. Knightly. Send your tips about the gaming and tourism industry to insidegaming@reviewjournal.com.

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