MGM scouts Jacksonville as potential site for Resort Casino

[duvaldude08]

VIA the Daily Record-

With a bill pending in the Florida Legislature to allow the construction of three destination resort casinos in the state, one major player in the industry acknowledges that it has looked at possible sites in Jacksonville if the law allows it.

“We’re looking at a lot of areas in Florida to see what kind of opportunities might exist,” said Alan Feldman, senior vice president of public affairs for Las Vegas-based MGM Resorts International.

The bill introduced by Sen. Ellyn Bogdanoff (R-Palm Beach) and Rep. Erik Fresen (R-Miami) would create a state gaming commission and allow the commission to regulate three destination resorts with “limited gaming” and other tourism facilities.

Much of the attention on the bill has focused on the possibility of casinos in South Florida, but the language of the legislation does not specify where the three resorts could be placed.

MGM has looked at sites in South Florida but also has sent a development team to Jacksonville to look at possible resort casino sites, Feldman said.

“We have tried to look at any of the viable, or what might be viable, areas in Florida,” he said.

MGM owns 15 properties in Nevada, Mississippi and Michigan, including some of the most well-known Las Vegas resorts: Bellagio, MGM Grand, Mandalay Bay and The Mirage.

While MGM is looking at sites, any talk of a resort casino in Jacksonville is very preliminary because the company does not know what the final legislation might look like and whether it will even pass.

A resort casino project would require local ap-provals, as well.

“There are so many variables,” Feldman said.

One drawback of the current legislation is that it requires a company to invest at least $2 billion in the development of a resort property.

Feldman said that large of an investment would probably not be viable in Jacksonville, and MGM would be more interested in Jacksonville if it is allowed to develop a project in the $500 million range.

South Florida would be a more likely destination for a $2 billion resort project, which is why much of the focus of the gaming legislation has been on casino opportunities in that area.

Feldman did not know which areas of Jacksonville that the MGM development team might have checked out for possible resort sites.

“I believe they looked pretty much all over,” he said.

MGM would be interested in sites near other entertainment and hotel facilities to make it a more attractive destination, and Feldman said that would make the resort a good investment for the community.

Feldman was not part of MGM’s development team but he has visited Jacksonville in the past and thinks it would be a good site for a resort casino.

“I found it to be an incredibly pretty place,” he said.

The fate of the gaming bill is uncertain, because there is plenty of opposition to the construction of the casinos.

For example, a report in the Orlando Sentinel last week said that the Walt Disney Co. is strongly opposing the legislation.

The Florida Retail Federation issued a news release this week opposing the bill, saying new casinos would hurt sales growth of existing businesses.

“For Florida retailers, the short-term employment gains of expanding casino gambling would not be worth the long-term damage we might inflict on Florida’s family friendly brand,” said a statement by Florida Retail Federation President Rick McAllister.

[duvaldude08]

With the casino room at regency  being approved with no problem, how do you thing the Mayor and city council would vie this opprtunity if it actually became avaiable? What locations do you think would be prime? I know we played around with it, but the shipyards still stands out to me. Riverfront proerty with tons of room for development.

[Bridges]

"Plenty of Opposition"?  That's putting it lightly.  What about the existing contract with the Seminole Tribe? 

[Tacachale]

This nonsense will just take money away from the Seminole an miccosukee tribes with no real benefit. The legislation is written to nearly guarantee the pork will go to s florida, where theyll more directly compete with the tribal casinos. But it's a crock wherever they put them.

[simms3]

So they have to allocate at least $2B for a resort development in a city in order to have a casino somewhere.  I can already tell you that $2B is a number way too large for any firm to invest in our city.  We just got a pension fund to allocate $130M to a tertiary market, and that may end up being the deal of the year because it is such a large amount for institutional money to invest in one small market.  Jacksonville is a larger tertiary market, but still a tertiary market.  $2B is even considered very large for a city the size of Atlanta, especially in "gaming".

Miami is definitely where any and all gambling will go.  There is no question.  Waterfront, South Beach, concentration of upscale hotels, shopping, and entertainment, international travelers and residents, name recognition, gateway market.  $2B is quite large even for Miami, actually, but can be done in certain circumstances such as this.

[duvaldude08]

So they have to allocate at least $2B for a resort development in a city in order to have a casino somewhere.  I can already tell you that $2B is a number way too large for any firm to invest in our city.  We just got a pension fund to allocate $130M to a tertiary market, and that may end up being the deal of the year because it is such a large amount for institutional money to invest in one small market.  Jacksonville is a larger tertiary market, but still a tertiary market.  $2B is even considered very large for a city the size of Atlanta, especially in "gaming".

Miami is definitely where any and all gambling will go.  There is no question.  Waterfront, South Beach, concentration of upscale hotels, shopping, and entertainment, international travelers and residents, name recognition, gateway market.  $2B is quite large even for Miami, actually, but can be done in certain circumstances such as this.

Im not sure if you caught it, but it did mention that 2B would not be fesiable for Jacksonville, but 500 million would. Whats your take on that?

[simms3]

Still too much, especially in this market.  Jacksonville is a $250M tops market right now.  The most expensive projects to ever get done in Jacksonville involved the latest port project with Mitsui and in the late 80s the Jacksonville Tradeport, which was built up over many years according to demand.  Perhaps the SJTC is up there at a few hundred million dollars aggregated and phased.  The note to secure the the Sawgrass Marriott was around $220M, definitely one of if not the largest loan in the area at the time it was foreclosed.

Even in recent years the largest mass-scale projects in Atlanta and Miami have topped off at around $1B, usually a lot less.  The only markets that consistently see projects to the scale of $500M and above are NYC, Las Vegas, Boston, DC, and San Francisco.  Put it this way, the City Centre project in Las Vegas came to around $8B and bankrupted A LOT of people and even hurt sovereign funds in a significant way, and that's Las Vegas! Where the service, gambling, luxury, party, and entertainment industries are king (outside of Macau).

For Jacksonville to be looked at seriously as a place to put a resort or hotel of any type, it needs to stay out of the hotel foreclosure/distress/non-performing newsfeed.  Our hotels are in horrible shape!  It's not time to put another one in, especially one worth $500M or let alone $2B (which would inevitably include high street retailers and expensive condos, neither of which can work in Jax).

Anyone looking to drop hundreds of millions of dollars on a hotel in Jacksonville is only going to get their desired return if a) there are lots of rooms, b) there is demand for lots of rooms, c) these rooms start at hundreds of dollars a night, and d) there are enough people that come to Jacksonville that are ready to spend hundreds of dollars a night.  We can't check any of these boxes.

[duvaldude08]

Still too much, especially in this market.  Jacksonville is a $250M tops market right now.  The most expensive projects to ever get done in Jacksonville involved the latest port project with Mitsui and in the late 80s the Jacksonville Tradeport, which was built up over many years according to demand.  Perhaps the SJTC is up there at a few hundred million dollars aggregated and phased.  The note to secure the the Sawgrass Marriott was around $220M, definitely one of if not the largest loan in the area at the time it was foreclosed.

Even in recent years the largest mass-scale projects in Atlanta and Miami have topped off at around $1B, usually a lot less.  The only markets that consistently see projects to the scale of $500M and above are NYC, Las Vegas, Boston, DC, and San Francisco.  Put it this way, the City Centre project in Las Vegas came to around $8B and bankrupted A LOT of people and even hurt sovereign funds in a significant way, and that's Las Vegas! Where the service, gambling, luxury, party, and entertainment industries are king (outside of Macau).

For Jacksonville to be looked at seriously as a place to put a resort or hotel of any type, it needs to stay out of the hotel foreclosure/distress/non-performing newsfeed.  Our hotels are in horrible shape!  It's not time to put another one in, especially one worth $500M or let alone $2B (which would inevitably include high street retailers and expensive condos, neither of which can work in Jax).

Anyone looking to drop hundreds of millions of dollars on a hotel in Jacksonville is only going to get their desired return if a) there are lots of rooms, b) there is demand for lots of rooms, c) these rooms start at hundreds of dollars a night, and d) there are enough people that come to Jacksonville that are ready to spend hundreds of dollars a night.  We can't check any of these boxes.

Gotcha! I just asked because I know you would have more insite on this type of thing than I would.

[tufsu1]

Still too much, especially in this market.  Jacksonville is a $250M tops market right now. 

I beg to differ....imagine a casino attached to a hotel and convention center....that's easily $500 million

[duvaldude08]

Still too much, especially in this market.  Jacksonville is a $250M tops market right now. 

I beg to differ....imagine a casino attached to a hotel and convention center....that's easily $500 million

You know I kind of evsion that. They would all feed off of each other because they would be clusterd also.

[thelakelander]

Didn't the $500 million quote for investment in Jax come from an MGM representative? Are we questioning whether he's right or wrong for what his company's site selection number may be?

[duvaldude08]

Didn't the $500 million quote for investment in Jax come from an MGM representative? Are we questioning whether he's right or wrong for what his company's site selection number may be?

I know personally Im not questioning anything. Im just happy that somebody would even consider Jacksonville on any level for this type of project. I would actually like to see it happen. Jacksonville has a long an ugly history of passing up on good opportunity (ran away the movie industry, turned down walt dinsey and ran busch gardens away). If done the right way, I think this would be good for us. Of course it wont come without opposition, but hey whatever.

[Tacachale]

Well clearly simms would know better about how much MGM is looking at than some MGM rep.

But the rep is talking about if there were major changes afoot. As it's written now, this casino business is a Miami-area pork project providing something we don't need to the detriment of the tribes.

Meaning, I'm surprised it's not signed, sealed, and delivered already.

[tufsu1]

i think the investors buying up land in Miami based on potential think its not pork

[thelakelander]

I believe the proposed casino on the Miami Herald site is estimated to cost $2 billion.