Velardo left his job as president and COO of the Fontainebleau project shortly before former Kerzner International president Howard C. Karawan joined the project as its COO in September. The 24.5-acre Fontainebleau project, located across the Strip from Circus Circus, is a 63-story, 3,889-room condo-hotel, casino and entertainment resort that is slated to open in September 2008. Amenities include many restaurants and retail shops, a 60,000-sf spa, a 3,200-seat performing arts theater, meeting space and a large rooftop pool and club scene.
In addition to Fontainebleau, Velardo is known for his role as president and CEO of the Mohegan Tribal Gaming Authority, which operates the Mohegan Sun, one of the most profitable casinos in North America. A JV that includes Kerzner developed the casino for the Mohegan Tribe and still receives a 5% dividend on the gross revenues.
Kerzner chairman and CEO Sol Kerzner says he's "confident we've chosen the best leader" while MGM Mirage chairman and CEO Terry Lanni says Velardo's past casino development and operational successes "gives us great confidence that his oversight on this project will yield tremendous results and growth for the joint venture."
Velardo began his gaming career as vice president for table game operations at Mirage Resorts in 1989 followed by tenure as senior vice president of casino operations and then president and COO for Trump Plaza in Atlantic City from 1991-1994. He served as GM for the River City JV in New Orleans before serving as president at the Mohegan Tribal Gaming Authority for 10 years, where he remained until 2006.
The Kerzner-MGM JV was formed in September as a 50-50 partnership. MGM's entity contributed the land, valued at $20 million per acre or $800 million, and Kerzner's entity contributed $600-million contribution, of which $200 million will flow through to the MGM entity such that each member's contribution is $600 million. The contributions must be made in full by spring 2009, according to the agreement.
The new resort will front the corner of Las Vegas Boulevard and Sahara Avenue, next to MGM's Circus Circus property and across Las Vegas Boulevard from Fontainebleau and the Sahara Hotel & Casino, which was sold earlier this year for between $300- and $400-million to a new ownership group that plans to renovate and revitalize the 55-year-old, 1,700-room property.
The MGM entity created for the project, named IKM MGM LLC, comprises multiple MGM Mirage-owned entities. The Kerzner entity, named Kerzner Istithmar Las Vegas LLC, includes Kerzner and Istithmar PJSC, which is the investment company of Dubai World, a Dubai government entity that owns Kerzner and that recently paid $2.7 billion for a 50% stake in MGM Mirage's Center-Strip integrated resort project called CityCenter.
Kerzner owns the Atlantis properties in the Bahamas and the One & Only-branded luxury hotel chain. MGM Mirage, the largest landowner on the Las Vegas Strip, owns and operates 17 properties located in Nevada, Mississippi and Michigan. Its $7.4-billion CityCenter development, scheduled to open in November 2009, includes a 4,000-room resort casino, 2,650 condominiums in multiple towers, two 400-room non-gaming hotels and 470,000 sf of retail and entertainment space.
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