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MGM Mirage, Kerzner Sign for North Strip Project

LAS VEGAS-MGM MIRAGE will provide the land for the multibillion-dollar resort and retain a 50% stake while Kerzner and Istithmar provide cash equity.

By Brian K. Miller | Updated on September 11, 2007

LAS VEGAS-MGM Mirage, Kerzner International Holdings and Istithmar Hotels FZE have agreed on terms for their joint venture development of a multibillion-dollar integrated resort adjacent to MGM’s Circus Circus hotel-casino property at the north end of the Las Vegas Strip. Construction is slated to commence in the first half of 2009 and open three years later.

Kerzner owns the Atlantis properties in the Bahamas and the One & Only-branded luxury hotel chain. Istithmar Hotels FZE, an investor in Kerzner, is a wholly owned subsidiary of Istithmar PJSC, the investment company of Dubai World, a Dubai government entity that recently bought a 50% stake in MGM Mirage’s CityCenter development at the heart of the Las Vegas Strip for $2.7 billion and is acquiring as much as $2.4 billion of MGM Mirage common stock.

Per the development agreement for the North Strip site, MGM Mirage will provide the land for the multibillion-dollar integrated resort and retain a 50% stake while Kerzner and Istithmar provide cash equity in exchange for 25% stakes. The land being contributed by MGM Mirage–40 acres, most of which it acquired earlier this year–is being valued at $20 million per acre.

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