The deal removed more than $3 billion in debt from MGM's books and will enable MGM to fully finance the $5 billion Atlantic City casino, which was announced Oct. 11, and forge ahead on other projects internationally, said chief financial officer Dan D'Arrigo.
"The deal really freed up our balance sheet to allow us to move forward in Atlantic City sooner than we would have been able to before," he said.
At least two more super casinos will be built in Atlantic City during the same time as the MGM casino.
Revel Entertainment Group L.L.C. is building a $2 billion casino on the Boardwalk, and Pinnacle Entertainment Inc., of Las Vegas, is developing a $1.5 billion one on the site of the former Sands Casino Hotel. Like MGM, each is targeting a 2012 opening. A fourth casino, by a private-investor group, has been proposed for the Boardwalk's southern end.
"The days of putting up boring-looking concrete buildings with big signs with big red letters are over," said David G. Schwartz, author of Roll the Bones: The History of Gambling and director of the Center for Gaming Research at the University of Nevada, Las Vegas. "People want the whole fantasy of gambling in a fantasy casino that does not look like an office building. They want to be in a high-class casino."
There is also another driving force.
"The new destinations in Atlantic City, as well as in Las Vegas, have to rise to a new level to attract a broad range of adults who are looking for a new experience," said Michael Pollock, publisher of Gaming Industry Observer and managing director of Spectrum Gaming Group L.L.C., of Linwood, N.J. "It's essentially the way to succeed in the market now."
That is Rosevear's game plan. He enlisted world-renown architect Kohn Pedersen Fox to carry out his vision. He described the new casino as being for everybody.
"This is a very large casino," Rosevear said. "It will be among the largest in the country, so you can't be too narrow in your demographic. That's why I've broken the casino into different areas."
One will be off the Race and Sports Book area; another will be more of a daytime casino; and a third section will feature entertainment with a nightclub.
The casino will have an indoor and outdoor pool, upscale retail and restaurants. The tallest tower -- 800 feet -- will be reserved strictly for V.I.P. guests and will be among the tallest buildings in New Jersey.
Rosevear has been making regular trips to Atlantic City since 1995, when he joined MGM from the former Caesars Entertainment Inc., and when MGM began assembling the 72-acre parcel.
He has 60 acres to work with initially. He said future expansion on the remaining 12 acres could be for residential, another hotel, condos, an entertainment arena, or more retail.
Gambling mogul Steve Wynn partnered with Boyd Gaming Corp., of Las Vegas, in May 1996 to develop the Borgata, near Harrah's and Trump Marina casinos, all in the Marina District. During the predevelopment phase, MGM bought Wynn's Mirage Resorts Inc. in May 2000, and MGM Mirage became Boyd's partner on the project. Instead of building a $750 million casino with 1,200 hotel rooms, they decided on a $1.1 billion Las Vegas-style mega-casino with 2,000 rooms.
"Great developers in the world have to take a little bit of a leap of faith that if they do something so spectacular, the market will respond," Rosevear said.
It clearly did. The vertical, golden-hued Borgata Hotel Casino & Spa debuted in July 2003 and has been Atlantic City's most profitable casino ever since.
"This clearly positions the Marina to compete favorably with other properties in Atlantic City as well as other emerging jurisdictions," said former Borgata chief executive officer Robert Boughner, on having MGM Grand move in next door. "We are delighted that it is now coming to fruition."