The news, released along with its second quarter results, comesone month after Morgans Hotel Group announced that the JV'sdeadline for obtaining construction financing for its piece of theproject had been extended to September 15, 2008. "Given Boyd'sannouncement and the difficulties in the credit markets, MHGbelieves that the joint venture will be unable to secure financingat favorable rates and conditions by [the deadline]," states MHG'sFriday morning announcement. "MHG does not intend to further extendthe joint venture agreement on its current terms but expects toevaluate future proposals relating to the project with Boyd."

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Located immediately south of Circus Circus, work on Echelonofficially got underway in June 2007. The 87-acre was slated tohold approximately 5,000 rooms in five hotels, 750,000 sf ofconvention and meeting space, 300,000 sf of retail, two liveentertainment venues, 30 dining and nightlife venues, a 140,000-sfcasino and parking for 8,000 cars.

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In April, Boyd announced that foundation work was complete forits three wholly owned hotels on the property -- Hotel Echelon, TheEnclave, and Shangri-La Las Vegas – that steel was being erectedfor the low-rise portion of the development, which encompasses muchof the common area for three of the five hotels, and thatexcavation for High Street, where the retail promenade and meetingcenter would be, was complete and foundation work was wellunderway. The project was on-budget and on-schedule to open in thethird quarter of 2010, the company said.

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Boyd's wholly owned piece of the project was slated to include3,000 of the 5,000 rooms in two high-rise towers, Hotel Echelon andthe Suites at Echelon, each with its own full-service spa, as wellas the casino, two theaters (one with 4,000 seats and the otherwith 1,500 seats), 25 restaurants and bars and a pool area. Therest of the site was to be developed via joint ventures and includethree additional hotels, a 750,000-sf outpost of the Las VegasExpoCenter, 300,000 sf of retail space, and several morerestaurants, bars and nightclubs.

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In addition to its JV with MHG for the Delano and Mondrian LasVegas, Boyd had inked a management agreement with Shangri-La Hotelsand Resorts for the one other hotel on the property, Shangri-La LasVegas. The retail was to be developed in a promenade format by apartnership of Boyd and General Growth Properties.

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The slate for Echelon was wiped clean in early 2007 by LVIServices Inc., which demolished 27 structures including the mainStardust hotel tower, a 32-story, 1,500-room structure that amongother things was the setting for the award-winning Hollywood movie"Casino."

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Echelon was to be the first Strip resort for Boyd, which hasheretofore catered to locals with nine off-Strip casinos andcasino-hotels. In addition to its Vegas-area properties, Boyd ownsseven other gaming entertainment properties located in New Jersey,Mississippi, Illinois, Indiana, and Louisiana.

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News of the delay pushed Boyd's share price up 30% in earlytrading Friday. Investors had been concerned with the glut ofdevelopment on the Strip in the face of deteriorating economicconditions. The company also anoucned Friday that it was suspendingdividends, and that its net income dipped to $21.7 million from$22.1 million a year earlier.

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