ATLANTIC CITY -- Boyd Gaming Corp. and Mirage Resorts Inc. might make their proposed Borgata casino hotel bigger and costlier than now planned, the two companies said Monday.
Their current plans call for a $750 million project with 1,207 hotel rooms.
"We have recently had discussions with Boyd regarding a possible increase in the size of the Borgata and each partner's required capital contribution," Mirage said in its annual financial report filed Monday with the Securities and Exchange Commission.
Mirage provided no details and a company spokesman declined comment. Mirage has been unable to comment on corporate matters since agreeing eight days ago to a $6.4 billion takeover from MGM Grand Inc.
"I can confirm what's in Mirage's 10-K (filing): We are talking about making the Borgata bigger and better," said Boyd spokesman Rob Stillwell. "And until we conclude those conversations, I just can't comment beyond that."
Any expanded Borgata plans would be a boost for a city rocked by the MGM-Mirage deal, a deal widely expected to set back two other proposed casino hotels here.
Analysts and city officials say it's likely that MGM will cancel or indefinitely delay its proposed billion-dollar casino next to Showboat. They also say it's likely that MGM will delay Mirage's proposed billion-dollar Jardin-Palais while it studies the project's costs and designs.
"We've had the same very general conversations with Mirage and with Boyd, and a bigger, better Boyd is most welcome," Mayor James Whelan said.
"My answer to all this uncertainty is, 'Let's get a shovel in the ground.' The bigger and better the project, the more it removes the air of uncertainty," he said.
If the Borgata project is revised, Stillwell said, Boyd could still break ground late this summer, "subject to various governmental approvals." Boyd had until recently been saying it would break ground before July.
"Our project is moving forward, no question about it," Stillwell said.
Boyd, lead partner in the Borgata project, is scheduled to appear before the Atlantic City Planning Board on Wednesday for final approval of its casino plans.
Boyd last fall disappointed city and business leaders, who are desperate for more hotel rooms here, by shrinking the Borgata project to 1,207 rooms from 1,537.
At the same time, Boyd applied for permits to add an optional 500-room second phase sometime after the casino hotel opens, which the company says will be in late 2002.
The Borgata would sit within the 150-acre Marina District site Mirage received for $1 and other arrangements under a development agreement with the city. The deal requires that Mirage see to it that "one or more casino hotels" are built on the site. There is no minimum rooms requirement under the deal.
Boyd is responsible for Borgata's design, construction and operation, and is contributing $150 million toward the project. Mirage is contributing 25 acres, which the companies value at $90 million, and $60 million in cash.
The joint venture would raise the balance through third-party financing.
In a related matter, MGM is allowing Mirage to proceed with the Jardin-Palais project "in accordance with current plans," according to a copy of their merger agreement disclosed Monday by Mirage.
It's one of the few instances in which Mirage is allowed to spend major capital while the deal is pending.
Mirage said it "intends to file an application for the CAFRA permit for our resort in the second quarter of 2000." Approval under the state Coastal Area Facilities Review Act is needed to permit any construction along the shore.
In other details involving the MGM-Mirage deal:
Mirage is "no longer planning" to build the $250 million hotel expansion at its flagship Bellagio casino.
Mirage Chairman and CEO Steve Wynn, who will have no role in the new MGM Grand, is entitled to three years' salary and bonus, worth $11.25 million.
Wynn has the right to buy Mirage's Gulfstream III jet and New York City apartment at "fair market value." He can also require MGM to buy his home on company's exclusive Shadow Creek golf course "at cost" within five years.
Wynn has the right of first refusal to buy any Mirage's fine art that MGM might sell.
Mirage cannot, without MGM's consent, buy a casino within 150 miles of Detroit, where MGM operates a highly profitable casino. |
