MGM, Kerzner Talking JV for North Strip Site

LAS VEGAS-MGM Mirage Inc. and Kerzner International Holdings Ltd. have signed a letter of intent to form a joint venture for the development a multibillion resort on 40 acres MGM acquired last month next to its Circus Circus property at the north end of the Las Vegas Strip. The two companies said Wednesday morning they hope to have a 50-50 joint venture agreement hammered out by the end of the third quarter, after which they would spend one year planning and three years developing.

The property is located at the corner of Las Vegas Boulevard and Sahara Avenue. Kerzner will lead the planning and conceptualization of this project, according to the two parties. Per the tentative agreement, MGM Mirage would contribute the land, valued at $20 million an acre, and Kerzner International and one of its financial partners would provide an equal amount of cash equity. No determination has been made with regard to branding.

Kerzner International chairman Sol Kerzner says he has studied the Las Vegas market “for some time” and, given the site and the two companies combined experience developing destination resorts, believes “this is an outstanding opportunity to create one of the most innovative and exciting destination resorts in the world.” MGM chairman Terry Lanni says the partnership is a way for the company to leverage its land and development experience and accelerate growth while conserving capital for additional opportunities. “We see this type of relationship as a major part of our company’s future,” he says.