Much of Bellagio art to be sold

Thursday, May 11, 2000 | 11:26 a.m.

MGM Grand Inc. plans to sell most of the Bellagio's art collection it's obtaining in its $6.4 billion acquisition of Mirage Resorts Inc.

Mirage owns about half of the art at the gallery at the Bellagio resort, with a total value of $400 million, while Mirage Chairman Steve Wynn owns the other half and leases pieces to the property.

MGM Grand Chief Financial Officer James Murren told Wall Street investors Wednesday that the art collection is among the assets that would be sold to reduce debt after the purchase of Mirage Resorts.

Murren, still in New York for meetings with analysts, could not be reached for comment today.

Joseph Coccimiglio, a gaming analyst with Prudential Securities, said today Murren told investors that when MGM Grand takes over Bellagio, it plans to keep an art gallery open, but will show rotating exhibitions arranged with private collectors, museums and other art galleries.

The concept is similar to one employed by the Rio hotel-casino, which has exhibited loaned art treasures from Russia and museum pieces from the sunken ocean liner Titanic.

Murren told analysts MGM will not sell all the art from the collection. The company said it wouldn't sell Pablo Picasso's works because they are the centerpiece of the Picasso restaurant at the Bellagio.

Wynn may want to buy the art from the MGM Grand, but a New York investment firm, Crandon Capital Partners, filed suit in District Court to place the art collection in a "constructive trust" to freeze any proceeds of the sale.

According to the court filing, the trust would assure that the MGM would not sell pieces to Wynn "at an inadequate price thereby favoring his interests over those of Mirage public shareholders."

Judge Nancy Saitta is scheduled to issue a decision on establishing a trust on May 22. Mirage officials, meanwhile, have filed a motion to have the case dismissed.

The Wall Street Journal reported today that other art collectors have expressed interest in acquiring pieces of the collection from MGM when they are sold.

Wynn's use of Mirage Resorts' money was controversial to investors who questioned whether the art contributed to a return on their investments. Wynn maintained that the art collection drew high-rolling customers to Bellagio who played in the casino and spent money at the high-end shops and restaurants.

Richard N. Velotta is a business writer for the Sun. He can be reached at (702) 259-4061 or by e-mail at velotta@lasvegassun.com