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LAS VEGAS-The Nevada Gaming Control Board has signed off on MGM Mirage Inc.‘s sale of two casinos in Laughlin, NV, to a partnership led by Anthony A. Marnell III, developer of the planned M Resort in Henderson, NV. The Nevada Gaming Commission is expected to give final approval on May 17 for the $200-million transaction.

Marnell III is son of casino developer and builder Anthony Marnell II, whose firm Marnell Corrao Associates built Wynn Las Vegas and Bellagio and will design and build M Resort. Laughlin sits 90 miles south of Las Vegas, near the confluence of Nevada, California and Arizona. The transaction was announced in October.

The two assets are the Colorado Belle and Edgewater hotel-casinos on the Colorado River. Marnell III is acquiring the properties in partnership with an affiliate of Sher Gaming LLC, led by Ed Sher. Combined, the Edgewater and Colorado Belle properties sit on 57 acres and hold 2,535 guest rooms and 138,000 sf of casino space. MGM acquired the properties in April 2005 as part of its acquisition of Mandalay Resort Group. The two casinos will give the Marnell-Sher partnership a total of three casino-resort properties. In June 2006, the partnership purchased the Saddle West Hotel and Casino in Pahrump, NV.

Marnell III plans to take his portfolio to four properties with M Resort, an 80-acre project that fronts Las Vegas Boulevard about 10 miles south of the six-mile stretch commonly referred to as the Las Vegas Strip. The $1.8-billion multi-phase development is slated to a 1,000-room casino-resort and a commercial center. The $700-million first phase is slated to include a 400-room resort with a 100,000-sf casino, a 70,000-sf events center, a full-service spa and several restaurants on 40 acres. Planned amenities include an outdoor canyon pool and entertainment venue, oversized guest rooms, suites, a top-of-the-tower lounge and a convention center.

Site work is under way. Actual construction is slated to begin in the next several weeks. First phase completion is slated for mid-2009. No updated information was available regarding the second phase. Previously, plans called for the remainder of the hotel rooms, an unknown amount of retail and approximately 1,950 condominiums in multiple mid-rise towers.

The project is being funded in part with a $160-million subordinated convertible note from MGM Mirage that was announced last week. The note matures eight years from its effective date and contains certain optional and mandatory redemption provisions. MGM has the right to convert the note into a 50% equity interest in The M Resort after 18 months of the note’s issuance if not repaid.

In addition to its Laughlin casinos, MGM last monthclosed on the sale of three casinos in Primm, NV, which sits on the California border 40 miles south of the Las Vegas Strip. Terrible’s” casinos operator Herbst Gaming paid $400 million for the Buffalo Bill’s, Primm Valley and Whiskey Pete’s hotel-casinos. Collectively known as Primm Valley Resorts, the group totals 2,644 guest rooms, 136,000 sf of casino space, 2,816 slot machines, three gas stations and a convenience store on 143 acres. Not included in the deal is MGM Mirage’s Primm Valley Golf Club, which Herbst will manage for MGM.

The only Vegas gateway market where MGM is maintaining a gaming stake is Jean, NV, where it owns the 302-room Nevada Landing property, the 800-room Gold Strike Hotel and Casino and two gas stations/rest stops catering to truckers The properties cover 166 acres straddling Interstate 15 just 30 miles south of the Strip. MGM plans to master plan, develop and operate gaming casinos and housing on the property along with other commercial and retail elements. MGM Mirage Inc. is selling a 50% stake in the existing portfolio for $75 million en route to the redevelopment.

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