With all the news coming out of Atlantic City over the past few weeks – their Mayor literally missing for almost 2 weeks, (he turned up in a mental institution, and resigned today), declining gaming revenues at almost all of the 11 Atlantic City casinos, Trump Entertainment Resorts having financial difficulties at all 3 casinos and putting itself up for sale, and also a major fire at the new addition to the Borgata which pushed back its opening date a few months until Summer 2008 – finally some VERY positive news has come from Atlantic City.

Today, MGM Mirage, the worlds largest gaming company, and 50% owner of The Borgata reveled plans for what was speculated to be “MGM City Center East” (MGM City Center in Las Vegas, is, I believe, currently the largest active construction project in America) – The MGM Grand Atlantic City.

MGM Grand Atlantic City

MGM Grand Atlantic City will be located on 72 acres between The Borgata and Harrah’s in the Marina Section of Atlantic City (North West Atlantic City), and its current cost estimates at $4.5 to 5 billion dollars make it one of the largest construction projects ever, casino or otherwise – as a comparison, the Wynn in Las Vegas cost only 2.7 billion, and the total cost of the entire World Trade Center site in Downtown Manhattan is being pegged at $10billion – making MGM Grand Atlantic City quite an investment and gamble by MGM Mirage.

The Borgata (50% owned by MGM Mirage & Boyd Gaming) single handedly woke Atlantic City up, and made it a destination place for the young and hip who did not want to be sitting next to a bus load of seniors from North Jersey, at the time of its opening in 2003, it was the first and only casino in Atlantic City which had a resemblance to Las Vegas – in other words, it was the first casino which was built with the intention to make itself a destination for more than just gambling – the Borgata opened with 4 high end destination restaurants, a 2 story dance club, theatre, and convention space – just a little over a year ago, Borgata opened up the first phase of their addition – adding another 4 restaurants (one of which I ate at last week – Wolf Gang Puck) another club called MurMur, additional retail stores – all high-end destinations. In Mid-2008, the Borgata will open The Water Club, (date moved from Spring 2008 due to the recent fire damage), a boutique hotel & spa with a few residences that will be attached – yet separate from the hustle and bustle of The Borgata.

MGM Mirage figured out something that most of the other casinos in Atlantic City have not figured out yet – 1. you have to spend money to make money, 2. Bring Las Vegas to Atlantic City – forget about adding a retail promenade (Tropicana & Caesars), or renovating rooms (Every Casino in Atlantic City) – you need to build from the ground up and keep Las Vegas in your mind. From what I’ve heard, MGM Mirage never even took into consideration the financial situations of the other Atlantic City Casinos – only The Borgata’s financial standings, because (as I’ve been saying for years now) contemporary, high end developments like The Borgata will continue to exceed expecations and bring in visitors, and is the future of Atlantic City.

Here are the facts on the MGM Grand Atlantic City. Construction should start in late 2008, and doors will open in 2012. It will be Atlantic City’s tallest building (so much for Pinnacle & Revel claiming that title as they had hoped), have Atlantic City’s largest gaming floor with 5,000 slots, 200 table games and a “large” poker room, it will contain a total of 3,000 hotel rooms, split into three separate towers, each of which will have its own unique identity – one an all suites tower – (think: EXPENSIVE), one “contemporary” tower (think: Boutique hotel), and one “upscale” tower (think: Ritz-Carlton/Waldorf=Astoria-like), each connected by two mid-air promenades, a 1,500 seat theatre, 500,000 square feet of retail (by comparison – The Pier at Caesars, is only 303,000 square feet, and The Walk, is 670,000 square feet – yet its all outdoors and split up in a number of buildings, and surrounded by busy public roads), a spa, a convention center (goodbye Atlantic City Convention Center!), and although it doesn’t mention it anywhere in their press release, if you look in the lower right corner of the rendering, it looks as though it will include Atlantic City’s first Monorail, which will probably connect Harrahs and Trump Marina to the MGM Grand.

The entire MGM Grand Atlantic City development will take up 60 acres, with the remaining 12 being reserved for possible residential development at a later date, in addition, MGM Mirage also owns another 14 acres to the South of the Borgata which has the potential for yet another Casino development.

MGM-Mirage completely stole the thunder from Pinnacle Entertainment and Revel Entertainment, both of which are expected to announce their plans for what they are doing with their sites on the Boardwalk. I would not be surprised to see Pinnacle & Revel rush to announce their plans in the next few weeks – or even in the next few days.. Just wait. In addition, it’s been highly speculated that Steve Wynn has his sights on the 150 acre former Bader Field for a super casino resort (probably much bigger than the MGM Grand Atlantic City), plus, the Atlantic City Hilton is going to get company from a consortium made up of Bruce Toll (from Toll Brothers) and the group developing The Chelsea, who are supposed to announce a new casino development, and FINALLY, I recently found out that the location where Trump’s Taj Mahal has the ability for three additional hotel towers – a huge selling point for any potential purchaser… Oh wait – and don’t forget about the site directly across the street from the Trump Marina..

The development potentials in Atlantic City make my mouth water..

Welcome to the Las Vegasification of Atlantic City.

It starts now.

I can’t wait.

andrew@alconic-inc.com