In Business Q and A Jim Murren, President and COO of MGM Mirage Interviewed by Richard Velotta / Staff Writer Jim Murren's promotion to president and chief operating officer of MGM Mirage didn't get much attention when it occurred last summer. That's because, at the time, the company was in the midst of so much other news that overshadowed the announcement: A deal with Dubai World that places half of the ownership of Project CityCenter in the hands of a foreign investor; another with Sol Kerzner, whose spectacular Atlantis project in the Bahamas is considered one of the premier resorts in the world, to design a Jim Murren is president and project with MGM Mirage on a site at Las Vegas Boulevard and chief operating officer of MGM Sahara Avenue; and the opening of a new casino resort in Mirage. Detroit. Photo by Steve Marcus And Murren, who joined the company in 1998, has been involved in all of them. He started with the company as executive vice president and chief financial officer after a 14-year Wall Street career. In 1999, he was named president and chief financial officer, and he is a member of MGM Mirage's board of directors and its executive committee. A strong believer in philanthropy, Murren and his wife, Heather, founded the Nevada Cancer Institute, a nonprofit institution dedicated to providing a cancer center for the state. He also serves as a trustee for foundations at the University of Nevada, Reno, and UNLV. Murren talked with In Business Las Vegas about several of his company's recent deals, progress at CityCenter and why he's frustrated with some of the community's problems — and the people who feel gaming taxes should be raised to solve them. Question: You have a new title since the last time we talked with you. What are your new responsibilities? Answer: As president and chief operating officer of the company, my principal responsibilities are the oversight of the majority of our properties at MGM Mirage. What that means is that most of the operating units, all of the Las Vegas properties with the exception of Monte Carlo and the Bellagio, our interests in Borgata, our interests up north in Reno, our casino in Detroit and in Biloxi all report directly to me. In addition, I have responsibilities with my partner, Bobby Baldwin, on casino marketing. Thirdly, as part of the executive committee with Terry Lanni and Bobby Baldwin and Gary Jacobs, we manage the affairs of the company at large. This is the day-to-day operation, right? It is. Does this make you MGM Mirage's No. 2 executive? I don't think so. What it makes me is a person who is motivated to help the company. It is a job change. The board has asked me to take on these new responsibilities and I'm happy to accept them. But in terms of a pecking order, the way I view it is I work for Terry Lanni, I work for the board and I'm happy to do my job and it's been good so far. Tell us about how you conceived Project CityCenter and how your concept has evolved. Give us an update on progress there. I was going back to the dark ages in college, I was in urban studies and an art history major and I've always been fascinated with the evolution of cities, why some cities succeed and others fail, why cities are located where they currently are, and what are the common elements to vibrant cities? What elements need to be resident for a city to be considered an exciting cosmopolitan place? I've always wondered at Las Vegas as a community. We're the fastest-growing community as you well know. We certainly are the largest born post-1950 with well over 1.8 million on our way to 3 million people, yet we don't have a dynamic city core. Mayor (Oscar) Goodman is doing his best and great efforts are under way downtown but beyond that, what we have in the southwest and southeast is suburban sprawl around a commercial core. I've always wondered why we don't have a stronger city center here. So the concept of CityCenter was born out of the idea that we could have a counterpoint to the suburbs, which I embrace and enjoy — I live in them — but a place where people here, who live here, as well as our visitors who come from other places will have the type of dynamic that you expect in a city. There will be urban density, tremendous urban planning. There will be great architecture, world- class architects. There will be a variety of brands that collide with one another to create the complexity that I think make cities so exciting, and I hope there are dozens of languages and people from around the world all convening upon a very exciting central place. We anticipate being able to help teach kids with a contemporary art program and bring people here and make it a day. I grew up on the East Coast, an hour from Manhattan, and some of my greatest experiences were when my mom would take me into the city and go to a museum or go to Mamma Mia, which at that time was an Italian restaurant and not a play, and go down to Little Italy and Chinatown. It was just tremendously exciting for a young man. I think that is a great aspirational idea for people who live here, to have a counterpoint to what I enjoy in the suburbs. So the idea of CityCenter was, do we want to build another resort? Do we need to build another sprawling horizontal structure with a Y tower or can we do something different? I have no doubt that we could have been successful building a resort. No doubt of that. But I think that would be selling the site short. It is clearly the prime piece of real estate of the Las Vegas Strip, right next to Bellagio. That is literally midtown Central Park from a standpoint of looking at it from a Manhattan analogy. And I thought we could do something more than a resort, that we could create the nucleus of a city to develop in a more appropriate way. We live in the desert. When are we going to wake up to that fact and build something more environmentally respectful to the desert, that has the concepts of LEED ratings in mind, that uses more verticality and urban density so that we don't consume as much property as we simply have, that has a much better flow from a vehicular perspective and, more importantly, from a pedestrian perspective. What has always been intriguing to me with an urban planning background is the Strip. It's not a city road, it's not even a county road. That's a federal highway. All these resorts were designed to fight one another thematically and from an egress perspective. That's the antithesis of a proper city. A proper city has that kind of complexity and diversity, but is organized in a fashion that is geared toward pedestrian friendliness, which is exactly the opposite of what we have right here. So CityCenter, in my mind, if we do it correctly, will be a great gathering place for people who live here as well as the tourists who are very important to us and will allow us to Ironworkers are shown at develop in this more urbanized way, which is more sensitive to the MGM Mirage’s CityCenter environment, offers better business and a better pedestrian project. experience. Photo by Steve Marcus And what's the status now? It's flying. Bobby Baldwin is running that project for us. There's no one better than Bobby at doing this. He's extraordinarily organized and I know he loves this. I've been with him quite a bit on this project. He is the captain of that ship. We have about 500-odd people working on CityCenter that work for our company. We have thousands of contractors and subcontractors that are being employed right now. We are on budget right now, we're on time right now. This is the most ambitious and largest privately funded project in the United States right now. It's due to open up, all facets of the project, all at once, in the fourth quarter of 2009. It is totally on track. By the end of this year, we'll spend close to $2 billion this year alone on CityCenter. That's a tremendous investment in the community. One of the keys to growth at CityCenter is in the sale of residential property there. What's the status of sales? We're over halfway done already. The residential market, of course, is soft nationwide. The market for vertical residential is in even worse shape than the broader overlay of residential. And yet we still continue to show success selling residential product at CityCenter. And the reason is, as we've tried to explain to folks in the past, is that we do believe there's a contrast between what we're providing at CityCenter and every Tom, Dick and Harry that announced a project in Las Vegas. Projects need a few key elements in order for them to have a chance of being successful in any real estate market and especially in the tough one that we're in right now. They have to have a tremendous location, and we have that.