MGM Will Add 2 Hotels in $700-Million Expansion

MGM Grand on Tuesday said it will build two new hotels--a Marriott Marquis and a Ritz-Carlton--as part of a $700-million renovation and expansion of its MGM Grand Hotel/Casino resort on the Las Vegas Strip.

Only a few years after it built the largest hotel in Las Vegas, MGM Grand will add the 1,500-room Marriott and the 500-room Ritz-Carlton to the 114-acre resort, which last year was renamed the City of Entertainment. Marriott International will manage the $200-million Marriott hotel and will help manage the Ritz-Carlton.

The expansion includes several projects that were announced last year by MGM Grand, which is controlled by financier Kirk Kerkorian. The complex is anchored by the approximately 5,000-room MGM Grand Hotel/Casino, which opened in 1993 at a cost of $1 billion.

“Other than the Ritz-Carlton, the entire City of Entertainment will be completed by the end of 1999,” said Alex Yemenidjian, president of MGM Grand. The Ritz-Carlton will be completed in 2001; a price tag for the project has yet to be determined, he said.

Ritz-Carlton Hotel Co., which is 49%-owned by Marriott, will also manage the Ritz-Carlton, whose construction will begin by 2000, a Marriott spokesman said.

About $500 million of new development will be financed from MGM Grand’s cash flow; the remaining amount will be drawn from the company’s $1-billion credit line, Yemenidjian said.