The transactions secure critical Strip access for its existing land holdings there, greatly increasing future development possibilities. "We see this as an opportunity to…expand and enhance the operations of our valuable Circus Circus property for years to come," says Terry Lanni, MGM chairman.
The Circus Circus property occupies 24 of its 68 existing acres in the immediate area. The other 44 acres holds the Circus Circus Manor (motel) and KOA Circusland RV Park. The additional 34 acres being acquired give the company a contiguous 78-acre canvass adjacent to the Circus Circus site for which long-term planning will begin immediately.
"We believe this property is ideally suited to exploring the opportunity to master plan with partners a major integrated resort destination," says Jim Murran, MGM president, adding that the company has received "significant interest" from third parties wishing to partner with MGM MIRAGE on Las Vegas development.
In the larger of the two pending transactions, the company has agreed to purchase a 26-acre parcel located at the southwest corner of Las Vegas Boulevard North and Sahara Avenue from Gordon Gaming Corp. and the Bennett family for approximately $444 million. The remaining eight acres are being acquired from Concord Wilshire Acquisitions for $131 million. A source with MGM Mirage tells GlobeSt.com that the larger of the two properties is the site of the old El Rancho Hotel, which was destroyed by fire many years ago and has been vacant ever since.
When the deal closes, MGM will control 865 acres with three miles of frontage on Las Vegas Boulevard, cementing its position as the largest landholder on the Las Vegas Strip. The deal comes on the heels of MGM selling off two of its three beachheads along the Nevada border.
Earlier this month, it closed on its $400-million sale of three casinos in Primm, NV, which sits on the California border 40 miles south of the Las Vegas Strip. Collectively known as Primm Valley Resorts, the group totals 2,644 guest rooms, 136,000 sf of casino space, 2,816 slot machines, three gas stations and a convenience store on 143 acres. Not included in the deal is MGM Mirage's Primm Valley Golf Club, which Herbst will manage for MGM.
In addition to unloading its Primm Valley properties, MGM also is selling its properties on the Colorado River in Laughlin, which sits at the very bottom of Nevada on both the California and Arizona borders. The $200-million sale of its Colorado Belle and Edgewater hotel-casinos there to a group led by Vegas developer Anthony Marnell III was announced in October and is expected to close in the coming weeks.
"These are non-core assets; our focus as a company, at least in Nevada, is in Las Vegas," an MGM source told GlobeSt.com at the time of the announcement, referring to its current integrated resort on the Las Vegas Strip, the $7-billion CityCenter project that got under way in June. Located between the Bellagio and Monte Carlo resorts, the project includes a 4,000-room luxury hotel and casino, two 400-room non-gaming hotels, 2,900 condominium units and 500,000 sf of commercial space.
The only border presence is it holding onto is in Jean, NV. It owns two casinos and two gas stations on 166 acres there that straddle Interstate 15 approximately 10 miles from the California border and 30 miles from the Strip. The company announced in February that it is selling a 50% stake in its portfolio there for $75 million and is gearing up for a master-planned redevelopment of the site that involves, among other things, closing at least one of the existing casinos and replacing it with a new one. For more on that story, click here.
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