LAS VEGAS-MGM Mirage Inc. is selling a 50% stake in its Jean, NV portfolio for $75 million en route to a master-planned redevelopment of the property. The casino-resort operator owns two casinos and two gas stations there on 166 acres straddling Interstate 15 just 30 miles south of Las Vegas and about 200 miles northeast of the outskirts of Los Angeles.

The Jean, NV portfolio includes the 302-room Nevada Landing property, the 800-room Gold Strike Hotel and Casino and two gas stations/rest stops catering to truckers. The portfolio came with MGM’s April 2005 acquisition of the Mandalay Resort Group.

The new partnership plans to master plan, develop and operate gaming casinos and housing on the property along with other commercial and retail elements. A source with MGM tells that few specifics on the redevelopment have been hammered out because the master-planning process has yet to begin, but the project will include a brand new casino-resort and a new residential component as well as upgraded truck stations.

One thing is for sure: the Nevada Landing property, which opened in 1989, will be shut down this April to make way for the redevelopment. The Gold Strike, which is currently having its hotel rooms renovated, will remain in operation at least until the planned new casino opens.

“Both casinos are profitable, but the reality is that as the years have gone by…, that the area is more efficiently served with one [casino],” a source with MGM tells “[Shutting one down] allows a much larger footprint to redevelop.”

The fate of the Gold Strike in unknown once a new casino-resort is developed on the property. “Whether [the Gold Strike property] will be torn down after the new casino is built, I can’t say I’d be surprised if it were to work out that way,” says the source. “It’s also possible it could be rebranded or built into something bigger. We will do whatever we determine is in the best interest of the joint venture.”

MGM’s would-be new partner is Jeanco Realty Development LLC, which includes American Nevada Holdings LLC, a subsidiary of American Nevada Corp., and Diamond Resorts LLC, a subsidiary of Cloobeck Cos. The partnership is subject to state gaming approvals; the related transaction is anticipated to close later this year.

As per the partnership agreement, MGM Mirage will contribute to a new partnership of the property and the associated assets, which currently generate $6 million in annual cash flow, and Jeanco Realty Development will contribute $75 million cash in two separate contributions.

MGM Mirage owns and operates 23 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. Its current major developments include CityCenter, a multibillion-dollar mixed-use urban development in the heart of the Las Vegas Strip; a new MGM Grand hotel and casino complex is being built in Downtown Detroit; and a 50% interest in MGM Grand Macau, a hotel-casino resort currently under construction in Macau S.A.R.

The move to recapitalize and redevelop its Jean, NV portfolio follows shortly its decision to sell its three casinos in Primm, which sits on the California border 13 miles from Jean, and all of its two casinos in Laughlin, NV, which sits 90 miles from Jean near the confluence of Nevada, California and Arizona. The Primm casinos were sold to “Terrible’s” casinos operator Herbst Gaming Inc. for $400 million. The two Laughlin properties were sold to a group led by Anthony Marnell III for $200 million.

American Nevada Co. is the real estate development arm of the Greenspun group of companies. American Nevada began developing the 8,400-acre Green Valley community in Henderson in 1978. In 2004, it opened the District at Green Valley Ranch, the state’s first metropolitan lifestyle center. American Nevada also is the managing partner of Aliante, a master-planned community that opened in 2003.

The Cloobeck Cos. provides development, management, operations and marketing for real estate properties. The company’s principals have developed Polo Towers, the first purpose built, high-rise timeshare property in the industry and, most recently, spearheaded the design of Marriott’s $450-million Grand Chateau.

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