Borgata Set to Launch $200M Expansion

And the price tag is massive--an estimated $200 million. For that, Boyd and MGM Mirage will add another 500,000 sf to the building, including a greatly expanded gaming area, more retail and restaurants, two more nightclubs and a larger spa.

"In many areas of the property, we simply cannot meet the strong demand for our facilities," says Robert Boughner, Borgata's CEO. "We are capacity-constrained in nearly every major product offering, and our customer research clearly signals that demand for our products is strong and growing.

"We realized early on that we needed to add supply, and we began planning and design work on an expansion of Borgata," Boughner continues.

While the expansion still requires various government and regulatory approvals, Borgata officials say they expect to break ground this coming December, and to have the expansion completed by the middle of 2006. The new portion of the sprawling complex will rise on an adjacent piece of land that is actually separately owned by partner MGM Mirage, and the Las Vegas-based Boyd Gaming will lease it from MGM Mirage, according to company officials.

And neither Boyd nor MGM Mirage anticipates putting any additional capital into the project. The cost of the expansion will come from the property's equity.

"We expect to renegotiate Borgata's bank credit facility, which has been paid down significantly from its original level, to provide funding for the project," according to Boughner.

Nor is this latest expansion likely to be the last. According to sources, a second expansion phase is already in the planning stages, a project that could add upwards to 1,000 rooms. A project boosting Borgata into the 3,000-room range would make it by far the largest hotel in the state, and the Northeast, and would propel it into Las Vegas territory in terms of sheer size.