This is a partial transcript from "Your World with Neil Cavuto," September 15, 2005, that was edited for clarity.
NEIL CAVUTO, HOST: Its casino was hit by Hurricane Katrina (search), but it's planning on hitting Las Vegas with the largest privately funded project ever in the U.S. of A., worth $5 billion. With us from Las Vegas is Terry Lanni. He is the chairman and CEO of MGM Mirage (MGM). Very good to have you back.
TERRANCE LANNI, CEO MGM MIRAGE: Hi, Neil. It is great to be back.
CAVUTO: Let's talk about Biloxi (search). I know you had facilities there. What is the latest you can tell us?
LANNI: Well, we had significant damage at our Beau Rivage property in Biloxi from the Hurricane Katrina. It is much more significant than a lot of people have thought. But we have significant insurance. We are committed to bet back into business as soon as possible. And I think it is fair to say that we are going to be out for at least a year, and probably a year-and-a-half before we can be back in business.
CAVUTO: Now, what about all the people who worked there? What happens to them?
LANNI: Well, we have located all about 120 of the 3,400 people. And we have given them a commitment to pay them for a total of three months and eight days for all of their pay, including their benefits.
We have set up an employment center on the site of the Beau Rivage to encourage them to accept positions in other properties we have around the country. And some have already agreed to do that. But not that many. And I suspect not that many will, because people tend to want to stay where they live and where their families are. But we are going to make that available.
We have set up the fund. The company has contributed $1 million to it. And on top of that, we will match dollar for dollar whatever any of our employees contribute to the fund. And continued all of the medical benefits and other factors there. And we have employed about 170 of them in removing the debris from the property to get it ready for reconstruction.
CAVUTO: This has been a very tough economic environment. We reported earlier Terry, as you might have heard, on two airlines that have obviously entered bankruptcy filings. And yet here you are in a dicey economy to some people's math after Katrina, building this gargantuan project in Vegas, what $5 billion plus. Some would people say you are a visionary. Other people would say you are crazy. What are you doing?
LANNI: Well, a lot of people for 28-and-a-half years in this business have said I was crazy. So, maybe I am beginning to think I am, too.
But we don't think that. We have continued to build in Las Vegas. We have significant properties. We enhance them. And more and more visitors continue to come. And I think that's going to be the case.
And what City Center Project will do, this $5 billion project, is literally going to be a paradigm for Las Vegas. It's going to be a center of it is a 60-story, 4,000 room hotel/casino designed by Cesar Pelli. So, it's a pretty amazing thing.
We brought the greatest architects in the world together on this project. I like to analyze it and say, you know, it's kind of an analogy of this would be going to the NFL draft and I got the first 10 picks. And the next team didn't get any.
CAVUTO: There is no doubt, Terry, you have a dream team doing this, but you are doing it in a city that has seen real estate prices quadruple over the last few years, that's hotter than hot. And some real estate experts say almost too hot. And yet you are diving in with abandon here.
LANNI: Well, we have 832 acres of land on the strip in Las Vegas, just our company. And 350 of those acres are underdeveloped, or undeveloped. And this 66 acre parcel was acquired at part of the package of the Mirage merger back in 2000. And the valuation of the land then was about 1/4 of what it is now. And I think that it's going to continue. The last deal that was done with Harris purchase of the Imperial Palace was over $20 million an acre.
CAVUTO: Do you fear, though, that some of your existing properties, lead by the Bellagio and some of these others, the Mirage itself, will see a bleeding if traffic goes to this new gargantuan enterprise?
LANNI: No. I think the thing in Las Vegas, Neil, is if you build something with emotional excitement, it brings new people, you are going to do well. If you are merely going to be taking people from other properties that's not going to work. But each time we have enhanced or built or acquired a facility, we get more visitors. And I think City Center will even be a stronger pretender of bringing more business and more people into the Las Vegas marketplace.
CAVUTO: So bottom line, you are starting on this now, right?
LANNI: We are. We actually the first phase is to build the garage for 5,300 cars. The project will open at the end '09.
CAVUTO: All right. See, for a while I thought we had a technical problem. I thought Steve Wynn controlled the technical stuff. But it had nothing to do with that. But thank you very much, sir. Good having you on. Terry Lanni of MGM Mirage.
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