MGM plans massive $5B mega-casino resort in A.C.

MGM Mirage today announced the biggest casino project in Atlantic City's history: a massive 3,000-room, three-tower hotel, casino and entertainment complex that will cost up to $5 billion.

Wow – bigger than the Borgata, it will bring more jobs, more economic opportunity – sounds great.

When MGM teamed up with Boyd Gaming Corp. four years ago to build the $1.1 billion Borgata Hotel Casino & Spa in this city's Renaissance Pointe, it redefined Atlantic City's skyline and completely altered the East Coast gaming market.

But MGM's announcement today of the MGM Grand Atlantic City raises the bar considerably.

The project, on a 72-acre tract that sits north of the Borgata, is destined to be the largest hotel and casino in Atlantic City, with three hotel towers featuring 3,000 rooms and the largest gaming floor with 5,000 slot machines and 200 table games. It will be Atlantic City's tallest building.

The company's board of directors approved the plan today. The new resort will have a budget in the $4.5 billion to $5 billion range, not including value of the land and associated costs, according to the company. MGM is also building the $8 billion CityCenter mega-resort in the heart of the Las Vegas Strip, which, like MGM Grand Atlantic City, it to  feature high-end retail space, a spa, entertainment venues, condominiums and hotel towers.

MGM, as co-owner of the Borgata, has made no secret of its desire to eventually build on the land next to the casino, considered one of the most precious pieces of remaining undeveloped property in Atlantic City.

Terry Lanni, MGM chairman and chief executive officer, said in an interview last month that his company planned to seek the necessary environmental permits to build there by early next year.

"Our company has carefully considered the possibilities for our landholdings in Atlantic City," Lanni said today in a statement. "We believe the success at Borgata demonstrates the eagerness for further evolution of the nation's second-largest gaming market."

The Borgata is Atlantic City's top-grossing casino, and Lanni said he wants to continue to build on offering very high-end amenities to the resort as slots competition from Pennsylvania and New York intensifies.

"People will pay for quality," Lanni said in a recent interview. "You offer them a quality product and they will come."

Groundbreaking for the MGM Grand Atlantic City is expected sometime in 2008, with a 2012 anticipated opening.

“It's a very exciting project that is another step in Atlantic City’s evolution to a full-scale destination resort, which is critical given the competition we currently face,” said Joe Corbo, president of the Casino Association of New Jersey.

MGM also owns some of the most prestigious casinos on the Las Vegas Strip, including the Bellagio, Mandalay Bay and Luxor.

Two other major casinos are being built on the Atlantic City Boardwalk: a $2 billion casino that is being constructed next to the Showboat by Wall Street firm Morgan Stanley, and a $1.5 billion casino on the site of the former Sands Casino Hotel by Pinnacle Entertainment Inc. of Las Vegas. Both companies are also aiming for a 2012 opening. These will bring the number of Atlantic City casinos to 14, including the MGM project.

Wallace Barr, the former chief executive of Caesars Entertainment Inc.,  is also considering building a boutique casino on the southern end of the Boardwalk with a group of local investors.