Capital spending may increase for Detroit project

Monday, May 5, 2003 | 9:19 a.m.

Mandalay Resort Group of Las Vegas said it expects to spend $300 million to $350 million on capital expenditures in the year ending Jan. 31, 2004, compared with $300.5 million in fiscal 2003.

The majority of these expenditures will relate to the completion of the new all-suites tower at Mandalay Bay in Las Vegas, according to the company's annual report released by the Securities and Exchange Commission last week. Current-year spending includes maintenance of slot machines, carpeting, computers and similar equipment at Mandalay properties.

The capital expenditures will be funded primarily from cash flow, though the company also has funds available under its credit revolver, the filing said.

"Actual capital expenditures for fiscal 2004 may differ significantly from the estimated range, particularly if we are able to proceed with the development of an expanded permanent facility in Detroit," the company said.

Mandalay Resort Group owns a 53.5 percent stake in MotorCity Casino in Detroit, which is to be expanded into a permanent casino at its current location by late 2005.

The permanent project is currently expected to include 100,000 square feet of casino space, a 400-room hotel, a 1,200-seat theater, convention space, and additional restaurants, retail space and parking, the filing said. An additional 400 rooms may also be required under a development agreement with the city of Detroit.