But five months later, something has indeed stopped the project, at least temporarily, and insiders say MGM Mirage has surveyed the landscape and smells a glut. "They don't want to build now," according to one local official who did not wish to be identified, "because they want to see how everything else shakes out."

The project has been in the works for close to seven years, delayed at various times by everything from land acquisition problems to quibbling over taxes. The official line for the latest delay is that "the board of directors of MGM Mirage has decided to direct its considerable excess free cash flow to improve its [position at its] Las Vegas, Detroit and Biloxi [properties] as well as to employ greater emphasis in achieving the company's objective of strengthening its balance sheet and repurchasing shares," according to a written statement. Company officials say that the stoppage is "temporary," and that they expect to proceed with the unnamed project at some point in the future.

On the balance sheet side, MGM Mirage says it "is suspending the capitalization of interest associated with [the project] and will expense such interest until the development process for this project recommences. This action will have no impact on operating cash flow but will reduce net earnings."

The company is still involved in development here through its 50% owned (with managing partner Boyd Gaming) Borgata, a 2,000-room, $1 billion casino-hotel property scheduled to open next summer. "We remain extremely excited about Borgata and its financial potential," according to Lanni. "This resort remains on schedule. Atlantic City is a vibrant market with an assured path for growth."

As far as the delay in the Marina District project, "it's essential that we have the ability to move aggressively when the right opportunities arise," Lanni continues. "Gaming is likely to expand overseas, as well as in several US states and on Native American land. We intend to participate in this growth."

Translation: for the short term, MGM Mirage would rather have its capital freed up to go after new deals in new markets rather than tie it up in a market facing a potential glut in a down economy, according to observers. Company officials would not indicate when the Atlantic City project would be moved back to the front burner.

Instant Insights /

MGM Grand Project Grinds to a Halt--Again

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