Sunday, June 24, 2007 | 7:10 a.m.
It was a big week for business in Las Vegas, and a good week for consumers and the environment in Washington.
First, the national news was significant, and has the potential to change the way we live for the better.
The Senate's Thursday passage of a sweeping energy bill that would require cars, trucks and SUVs to achieve fuel efficiency of 35 miles per gallon by 2020 is a big step toward reducing the country's reliance on oil.
That's still a far cry from the efficiency of cars in Europe, where automakers voluntarily agreed to increase fuel efficiency to 44 miles per gallon by next year, but much better than our current standard. Automakers' car fleets now must average 27.5 mpg; SUVs, vans and pickup fleets are required to average 22.2 mpg.
The increased efficiency would represent the first significant improvement since lawmakers passed the CAFE standards (corporate average fuel economy) in 1975.
Since then, the powerful auto industry has been able to derail efforts to improve fuel economy, arguing that domestic automakers are already suffering from aggressive foreign competition and that American consumers want to buy bigger vehicles, including gas-guzzling behemoths such as Hummers, Escalades and F-series pickup trucks.
That argument came back to bite U.S. automakers when recent spikes in gas prices prompted consumers to turn to more fuel-efficient vehicles from Japan and South Korea.
The bill, which passed by a 65 -27 vote, must still pass the House and be signed by the president to become law.
George W. Bush's love of the oil business and his lack of interest in environmental concerns doesn't bode well for the bill's chances, but we can only hope that he'll take a look at the Senate vote and realize that common sense should prevail.
On the Strip, three big stories competed for attention.
First, Boyd Gaming Corp. kicked off construction of it s $4.7 billion Echelon Las Vegas project Tuesday on the former Stardust site.
With former Borgata honcho Bob Boughner at the helm, a squad of former Borgata bosses from Atlantic City to assist him, exciting boutique hotel partners and a good-looking project design that takes aim at the increasingly robust luxury end of the market, Echelon makes a statement that Boyd Gaming is ready to compete on the Strip, the biggest of the big leagues.
Second, Kirk Kerkorian's Tracinda Corp. on Wednesday said it was no longer trying to buy Bellagio and CityCenter from MGM Mirage.
Even so, the move was another brilliant stroke by the billionaire, who showed the stock market that MGM Mirage shares were undervalued, and then benefited when his expression of interest in the company's top two Strip properties fueled a better-than-20-percent spike in MGM's share price.
With 56 percent of MGM Mirage shares, Kerkorian's original move was a win-win. Either he bought the properties at a good price, or the market realized MGM Mirage assets were undervalued, boosting share prices.
And third, also on Wednesday, MGM Mirage announced a preliminary deal to jointly build a new megaresort with Kerzner International at the north end of the Strip, at the southwest corner of Sahara Avenue and Las Vegas Boulevard. Kerzner's Atlantis is, by far, the best casino resort in the Caribbean.
The deal will be similar to deals that MGM Mirage entities have benefited from in the past, with one partner providing the land, the other side providing start-up capital, and the joint venture borrowing enough additional money to build the resort.
MGM Mirage's Monte Carlo was built that way, with Mirage Resorts providing the land and Mandalay Resort Group forerunner Circus Circus Enterprises providing the cash and operating the resort. And Mirage Resorts provided the land to Boyd Gaming to build Borgata, a property the companies still share but Boyd operates.
It is a great business model, especially for operators with a lot of land bought for less than market price.
Of course, Kerzner International owner and CEO Sol Kerzner must, like every other executive who passed on Strip land deals over the years, regret his decision in 2000 to pass on his option to buy the Desert Inn for $275 million, a price that valued the property at about $1.5 million an acre.
The 30 acre-site MGM is contributing to the Kerzner joint venture is valued at $600 million, or $20 million an acre.
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