Echelon Resort
Echelon Resort is a multi-hotel casino complex being built by Boyd Gaming on the Las Vegas Strip, that will consist of the following hotels:
Echelon is a multi-hotel casino complex being built by Boyd Gaming on the Las Vegas Strip.
The following is Boyd Gaming’s description of its Echelon Resort project from the company’s 2007 Form 10-K filing .
In January 2006, we announced plans to develop Echelon Resort on the Las Vegas Strip and commenced construction in June 2007, with a planned opening in the third quarter 2010. We estimate that the wholly-owned components of Echelon will cost approximately $3.3 billion. In addition, we have completed the design and development work on two joint-venture elements of Echelon, which include our hotel joint venture with Morgans Hotel Group LLC (“Morgans”), and our High Street retail promenade joint venture with General Growth Properties (“GGP”).
We expect that Echelon Resort will include a total of approximately 5,000 rooms in five unique hotels as well as the following amenities:
• Casino space: 140,000 square feet
• Entertainment venues: 4,000-seat and 1,500-seat theaters, operated by AEG Live
• High Street retail promenade: 300,000 square feet, operated by GGP
• Meeting and Convention space: 750,000 square feet
• Parking: approximately 9,000 spaces
Echelon will also include approximately 30 dining, nightlife and beverage venues in addition to an approximately 5.5 acre multi-level swimming pool and recreation deck.
On February 27, 2007, we exchanged the Barbary Coast for 24 acres on the Las Vegas Strip, bringing our total land holdings to 87 contiguous acres on the Echelon site. The additional land allowed us to modify the site layout of Echelon and increase the overall size of the project to 65 acres, and provides us with two additional parcels of six and 16 acres that could allow for the addition of another distinct hotel, a residential component, and additional retail, dining, meeting and casino space.
In connection with our 50/50 joint venture with Morgans to develop, construct and operate the Delano Las Vegas and the Mondrian Las Vegas hotels at Echelon, we will contribute approximately 6.1 acres of land and Morgans will ultimately contribute $91.5 million to the venture. The expected cost of the project, including the land, is estimated to be approximately $950 million; however, we can provide no assurances that the estimated cost will approximate the actual cost. Construction of the Delano and Mondrian hotels is expected to begin in the second quarter of 2008. Given the current state of the credit markets, we anticipate that additional equity and/or credit support will be necessary to obtain construction financing for the remaining cost of the project. This additional equity and/or credit support may be contributed by us or Morgans, or from both parties, and/or from one or more additional equity sponsors. If the joint venture is unable to obtain adequate project financing in a timely manner or at all, we may be forced to sell assets in order to raise capital for the project, limit the scope of the project, defer the project or cancel the project altogether. Should we postpone or cancel this project, we expect to continue the construction of the remaining aspects of our Echelon development project; however, our expected returns from the Echelon development project would be adversely impacted due to the change in the scope of the overall project.
In May 2007, we formed our 50/50 joint venture with GGP, whereby we will initially contribute the above-ground real estate (air rights) and GGP will initially contribute $100 million to develop the High Street retail promenade at Echelon. The expected cost of this project, including the air rights, is estimated to be approximately $500 million; however, we can provide no assurances that the estimated cost will approximate the actual cost. We expect that the joint venture will be 100% equity funded. We anticipate that any additional cash outlay from us will come from cash flows from operations and availability under our bank credit facility, to the extent availability exists after we meet our working capital needs. If availability under our credit facility does not exist, additional financing may not be available to us, or, if available, may not be on terms favorable to us.
