Columnist Jeff German: Vegas ties its future to MGM Mirage

Friday, Feb. 25, 2005 | 5:24 a.m.

Jeff German's column appears Tuesdays, Wednesdays, Fridays and Sundays in the Sun. Reach him at german@lasvegassun.com or (702) 259-4067.

WEEKEND EDITION

February 26 - 27, 2005

Burton Cohen felt a sense of pride in the back of the room last week as the Nevada Gaming Commission prepared to approve MGM Mirage's historic $7.9 billion buyout of rival Mandalay Resort Group.

The retired casino industry icon, a leading Strip executive for four decades, said he came to support his good friend and contemporary, billionaire Kirk Kerkorian, the controlling shareholder of MGM Mirage.

During a break in the three-hour hearing, the 81-year-old Cohen marveled at how much the casino industry has matured since his early days on the Strip in the 1960s.

"If you had told me this would be happening 40 years ago, I would have had you committed to an institution," he said with a laugh. "This represents growth. If you don't grow, you're going to die."

And when it was all over -- after the Gaming Commission approved the megamerger that makes MGM Mirage the biggest casino company in the world and the biggest player on the Strip with 11 prized properties -- Cohen's words were echoed by others of prominence in the room.

Commission Chairman Peter Bernhard, who led his colleagues through a series of thoughtful questions about the merger's potential wide-ranging impact, said he came away convinced that the deal was in the best interests of Nevada.

"I can't help but think that this is going to bode very well for the future of Las Vegas," he told me afterward.

With the rapid expansion of gaming in California and around the world, it may be that consolidation on the Strip is the only way for Las Vegas to ensure its survival.

But what troubles some observers is that we're putting our trust in one company to lead the way. Fortunately, it's a company that has proven it can be trusted.

"The people at the highest levels of that corporation have been in Nevada for a long period of time," former Gov. Bob Miller said. "They care about the community. It's not like this is some entity from outside the state coming in and taking over."

Under the leadership of MGM Mirage Chairman Terry Lanni the last 10 years, the company has repeatedly demonstrated its commitment to Las Vegas.

Since its merger with Mirage Resorts in 2000, the company has invested $1.7 billion on the Strip. And it has announced its most ambitious endeavor of all -- Project CityCenter, a sprawling $4.7 billion master-planned development on 66 acres south of the Bellagio.

"As we learned long ago," MGM Mirage President Jim Murren told the commissioners, "what's good for Las Vegas, is good for MGM Mirage and vice versa."

At the same time, however, there are legitimate concerns that the company is becoming too big a political force.

When Commissioner Sue Wagner, a former lieutenant governor, pressed Lanni on that subject, he insisted that MGM Mirage has a history of being circumspect with its political power.

"We don't utilize clout," Lanni said. "We don't utilize threats."

Lanni also insisted during and after the hearing that he doesn't believe the merger has increased MGM Mirage's influence in the state.

But the facts don't necessarily support that contention.

"It's simple math," said D. Taylor, secretary-treasurer of the Culinary Union, which represents casino workers. "One plus one equals two, and two is greater than one."

MGM Mirage will now own nearly half of the prime real estate on the Strip and see its employee base rise from 40,000 to 75,000. And there's no telling how much more cash the company will be able to spread around to political campaigns.

Lanni did say he's looking for MGM Mirage to play a greater role in the direction of the tourism industry. He wants his company to have a seat on the 13-member board of the Las Vegas Convention and Visitors Authority.

It's a company that's taking Las Vegas to a new level -- with a new level of trust.