In this week's column, the $9 billion CityCenter project by MGM Mirage and Dubai World on the Las Vegas Strip gets additional funding despite a tough economy; the American Society of Landscape Architects says that like their brethren in building design, billings and business are down due to the economic pullback. Meanwhile, Orbital Sciences Corp. will launch a big expansion in Chandler, AZ; development veterans band together to form The Flagstone Group in Texas; and four merged Colliers offices strengthen their development and project services business in Washington, D.C., St. Louis, New York and Baltimore.
Also, Sheraton opens its downtown Phoenix hotel, Princeton HealthCare breaks ground on its $441 million medical center in New Jersey, and a stadium site in Chester, PA gets an important brownfield designation.

Plus, CoStar reports on still more new projects and land deals around the country.

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Editor’s Note: In The Pipeline is a column by Senior News Editor Randyl Drummer on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- or sign up to be added to our distribution list to receive future In the Pipeline columns for free by e-mail. Read last week's column.

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MGM Mirage's Massive CityCenter Gets Funding

MGM Mirage and its Dubai-based partner said this week they have successfully amended their senior credit facility and completed $1.8 billion of the $3 billion in financing needed to complete the CityCenter joint-venture development project on the Las Vegas Strip, one of the world's biggest and most expensive construction projects.

MGM Mirage (NYSE: MGM), controlled by billionaire investor Kirk Kerkorian, said that in addition to the new $1.8 billion credit facility led by Bank of America, Royal Bank of Scotland, UBS, BNP Paribas, and Sumitomo Mitsuiis, the JV has received signed commitments for $500 million and hopes to raise additional funds to complete the $3 billion financing package for the 76-acre "city within a city." Both MGM Mirage and partner Dubai World are working with lenders through a syndication process to fill the gap.

States including Kentucky, Maine, Pennsylvania, Ohio, Illinois, Massachusetts and Kansas, are considering new casino development as an alternative revenue source as the economic downturn continues to strap state and local coffers. However, worsening economic and credit conditions and tightened consumer spending has busted the shares of casino companies over the last year, particularly during the third quarter.

Many have been forced to abandon or suspend development projects. Pinnacle Entertainment (NYSE: PNK) pulled the plug on a $625 million casino resort and hotel in Wyandotte County, Kansas, and delayed its planned $1.5 billion to $2 billion mega-resort in Atlantic City, NJ. Shares of Trump Entertainment Resorts Inc., which operates Donald Trump’s three casino, were hammered during the quarter, as were Boyd Gaming Corp. Some hotel and casino operators have run into liquidity problems, including Las Vegas Sands Corp., which received a $475-million infusion from its chairman Sheldon Adelson last week.

Gambling analysts lauded the CityCenter credit facility as a vote of confidence in the project. Earlier on Monday, MGM said the amended credit facility raised the maximum total leverage ratio to 7.5 times cash flow. Previously, the leverage ratio was set at 6.5 times cash flow through Sept. 30, 2009, stepping down to six times on Dec. 31, 2009.

"Even in the current difficult lending environment, strong well-conceived projects attract financing -- CityCenter is such a project. We appreciate the strong support CityCenter has received from these participating financial institutions," said Dan D'Arrigo, executive vice president/CFO of MGM Mirage.

Gross costs are expected to total $9.3 billion, including construction and interest, $1.7 billion for land, $200 million for pre-opening expenses and $100 million of intangible assets. CityCenter is scheduled to open in late 2009 between Bellagio and Monte Carlo resorts on the Las Vegas Strip. The project features a 61-story, 4,000-room gaming resort; three luxury non-gaming hotels including Las Vegas' first Mandarin Oriental; the 2,600-condo Veer Towers, and The Crystals, a 500,000-square-foot retail and entertainment district.

Landscape Architects Aren’t as Busy, Either

A couple of weeks ago, we reported on the monthly Architectural Billings Index, a leading measure of future nonresidential construction published by the American Institute of Architects (AIA). It showed that billings are down, building design architects aren’t as busy and construction is likely to slow through at least mid-2009.

This week, the landscape architects weighed in. Less than half of landscape architecture offices responding to a survey were busier than usual last quarter, and only a quarter of firms plan to hire in the short term as the economic turmoil begins to be felt across the profession, according to the latest Business Quarterly survey by the American Society of Landscape Architects (ASLA).

Only 44% of the 267 responding offices reported average or above billable hours in third-quarter 2008 and just under 43% reported average or above inquiries during the same period. That’s 12 and 7 percentage point reductions, respectively, from the previous quarter. Just over 25% plan to hire in the upcoming quarter, down from 29% in the second quarter.

"The reduced demand for landscape architecture work comes as no surprise considering the current problems with the economy," said Nancy Somerville, executive vice president/CEO of the society. "International projects, particularly in the Middle East and Pacific Rim, are a strong and expanding source of work for many firms. Domestically, the public sector remains the most robust source of projects."

The ASLA Business Quarterly survey asks quarterly benchmarks on key statistics including billable hours, inquiries, and hiring plans. The Q3 2008 national survey was fielded September 12 to September 30, with 267 firms responding.

Orbital Sciences to Launch Major Expansion in AZ

Dulles, VA-based space technology firm Orbital Sciences Corp. unveiled plans for an expansion of its launch vehicle research and development, engineering, manufacturing and testing facilities in Chandler, AZ.

Orbital will expand under a build-to-suit agreement with Gilbane Development Co. on land adjacent to its current location on South Price Road. Orbital is also renewing the lease on its facility for another 11 years with W.P. Carey & Co., ensuring that the company will remain an anchor corporate tenant of the Ocotillo area of Chandler for at least the next decade.

Orbital occupies about 355,000 square feet at on South Price Road, between Dobson Road and Queen Creek Road. The firm will expand the facility by about 13,000 square feet. In addition to the South Price Road location, Orbital leases another 172,500 square feet in the Chandler area.

Anticipating continued growth in its launch vehicles business, Orbital unveiled its plans to soon break ground on new facilities on land adjacent to the company’s main Chandler plant. Gilbane Development will build the new build-to-suit campus expansion on land adjacent to Orbital’s main location.

The first phase of the development will include a new 82,000-square-foot building that Orbital will lease to house about 330 employees.

Ultimately, the expansion will comprise up to 232,000 square feet in three new buildings. Combined, the new development and current facility will create a campus of about 600,000 square feet capable of holding nearly 2,200 employees. Orbital employs about 1,300 full- and part-time employees, plus another 150 on-site contractors, at its Chandler operations.

The U.S. government uses the vehicles to deploy and test critical missile defense systems and to launch scientific and national security satellites. Orbital is also developing a new rocket, Taurus II, which will be capable of carrying out cargo transportation missions to the International Space Station and boosting commercial satellites into orbit.

Sheraton Phoenix Downtown Hotel Checks In

By Andrew Deichler
The Sheraton Phoenix Downtown Hotel has completed construction, ahead of schedule and well within the projected $350 million budget. The hotel is part of Starwood Hotels and Resorts' aggressive expansion for its Sheraton line, which promises more than 50,000 new rooms and renovated rooms by 2009.

The 31-story, 1,000-room Sheraton Phoenix Downtown at 340 N. 3rd St. adjacent to the Phoenix Convention Center is Arizona's largest hotel. Hotel features include 80,000 square feet of meeting space, a 4,500-square-foot outdoor pool, two ballrooms and a cutting edge fitness center.

The Sheraton Phoenix Downtown broke ground in March 2006. Architectural firms Arquitectonica and RSP designed the hotel, with Tynan Group handling development and Perini Building Co. on board as the contractor.

Texas Development Veterans Announce New Group

Texas real estate development and business veterans Brady Oman, Red McCombs and Hal Jones have announced the formation of The Flagship Group, an integrated development company specializing in residential and hospitality development.

Oman has developed upscale private golf communities for 20 years, creating residential communities such as Northshore on Lake Travis in Austin, Texas, and Escondido, a lakeside golf community featuring a Tom Fazio golf course located on Lake LBJ near Austin. McCombs is a Texas business icon who co-founded Clear Channel Communications and has owned automotive businesses and interests in the San Antonio Spurs, Denver Nuggets and Minnesota Vikings. Jones was founder and CEO of United Plant Service and created Austin-based Hal Jones Development. . Based in Austin, Texas and San Diego, CA, The Flagship Group executes all phases of development including acquisition, entitlement, site planning, engineering, development and marketing.

Merged Brokerages Name Project/Development Director

Cassidy & Pinkard Colliers, Colliers ABR, Colliers Pinkard and Colliers Turley Martin Tucker, which finalized their merger of business operations last month, this week announced a move to strengthen their development services business.

The combined firms appointed Gary Helminski as national director for project and development services. Helminski will report to Joseph Stettinius, Jr., CEO of Cassidy & Pinkard Colliers, based in Washington, D.C. The move "allows us to increase our ability throughout the country to offer a complete line of project and development services, from strategic planning through construction management," Stettinius said.

Helminski will lead the expansion of the consolidated companies' practice, currently with more than 120 professionals, to include development services, multi-site program management, relocation and move management, and national account project management for both corporate and investor clients.

He has 25 years experience in strategic planning, location analysis, capital planning, financial analysis, re-positioning, development management, construction and operations. Prior to joining Cassidy & Pinkard Colliers, he served as managing director of the project and development services group at Jones Lang LaSalle.

University Medical Center of Princeton in NJ Breaks Ground

Princeton HealthCare System and its construction manager Turner Construction have broken ground on the $441 million University Medical Center of Princeton at Plainsboro.

The 636,000 square-foot medical center to be built over the next three years will include a main concourse that leads into the portals for eight "Centers of Care" for cancer, cardiac and pulmonary care, neuroscience, maternal-child health, surgery, emergency services, eating disorders and testing and treatment.

The medical center "not only changes the way people think about hospital care, it changes the healthcare building industry," said Thomas V. Reilly, vice president and general manager for Turner Construction New Jersey. For inpatient stays, the hospital will feature private canted rooms designed to prevent the spread of infections, reduce falls, increase visibility and improve communications. Designated "family zones" have been designed with visitors in mind and overnight sleeping accommodations are provided in patient rooms.

Stadium Site in $400M Project In Chester, PA Named as Brownfield

A former industrial site along the Delaware River in Chester, PA that will be home to a Major League Soccer stadium and mixed-use development has been designated a brownfield project, acting Department of Environmental Protection Secretary John Hanger said.

The designation will ensure that the Chester Waterfront Redevelopment project, a mix of recreational, residential and commercial development, receives priority review and has a single point of contact within the state agency to help smooth the way for development.

The project "will bring new jobs and tax revenues to a city that has struggled for decades, and will provide a tremendous opportunity to reconnect the surrounding neighborhood with the waterfront," Hanger said. "The stadium will be a catalyst for future waterfront development in Chester."

The project is expected to create 360 full-time jobs within three years. Central to the project is the construction of a $155 million, 18,500-seat soccer stadium that will also serve as a venue for concerts and community celebrations. As a condition of the MLS franchise awarded to the Philadelphia area in February, the stadium must be completed and opened for play by April 2010. The environmental agency has issued a permit to Bucinni/Pollin Group allowing the developer to begin preliminary construction. The project, expected to cost about $400 million, incorporates public and private financing.

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Editor’s Note: In The Pipeline is a column by Senior News Editor Randyl Drummer on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- or sign up to be added to our distribution list to receive future In the Pipeline columns for free by e-mail. Read last week's column.

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More New Land Sales and Projects

Almac Group purchased 60.3 acres at 64 Skippack Creek Road in Souderton, PA. The price breaks down to $83,109.65 per acre. The property will become the pharma company's new North American home. The property was previously being used as a farm. Approvals are in place for office construction, tentatively slated for completion in 2010. The private landowner did not use a broker and Almac Group completed the deal in house. (By Edward Kennedy)

Erickson Retirement Communities purchased 97.2 acres along 2010 McKee Road in Matthews, NC from Herbert W Fincher to build Erickson's first retirement campus community in the Carolinas. The 105-acre campus will feature amenities such as walking/biking trails, full-service bank/ATM, computer lab, library and on-site medical and fitness center. Groundbreaking is set for Oct. 15 with fall of 2009 delivery. Erickson will donate 39 acres to the city of Matthews for park development. The seller, Herbert Fincher, was self-represented in the transaction while Fred Beck of Fred Beck & Associates, LLC, represented Erickson. (By Antwan Davis)

Kisco Senior Living has acquired the site of the old Jefferson Pilot building and the surrounding 141 acres in Greensboro, NC, with the intent of building a retirement community. Lincoln National Life Insurance Co. sold the property for $9.8 million or about $69,500 per acre. The 243,509-square-foot building at 5300 High Point Road, originally constructed in 1928, has been vacant since 1993. The 304-unit retirement complex will feature a range of garden homes and assisted living units. Wilfred Yearns of Yearns Properties represented Kisco while Robbie Perkins of NAI Piedmont Triad represented Lincoln National Life Insurance. (By Hansel Tan)

Oxford Development Co. bought 5.8 acres on 5401 Trinity Road in Raleigh, NC from Donald and Collete Finger for future hotel development. The land traded for just over $2.72 million, or about $468,000 an acre. The land is in Wake County with all utilities to the site. David "Whit" Kenney of Nine Sages represented the sellers in the transaction. Christopher Rio of GVA Advantis represented the buyer. (By Krystal L. Thomas)

WCA Partners bought 13 acres on Martin Luther King Jr. Blvd. in Chapel Hill, NC, from Ram Development to develop a mixed-use project. The parcel, which is a little more than three miles north of the University of North Carolina, traded for $3 million, or about $232,000 per acre. WCA is reportedly planning commercial and residential elements but not disclose a timetable. Tom Wiltberger of Terra Nova Global Properties represented both parties. (By Bryan McCaslin)

Russo Development of Hackensack, NJ, is developing a flex building at 50 Madison Road in Totowa, NJ and has named CB Richard Ellis as leasing agent. This property is under construction with an estimated completion date of next March. The planned 126,370-square-foot R&D building includes 16 loading docks, 32-foot ceiling height, 800 amps and 480 volts. CBRE's Thomas Mallaney and Carrie Brown will be handling the leasing for this property and anticipate the first tenants to move in by the end of first quarter next year. (By Kiera Martin)

Wesley Village Development, LP acquired 2000-2004 Thrift Road in Charlotte, NC. The 15.8 acres was purchased for $7.7 million or $487,064 per acre from Godley Campbell LLC, West End/ Wesley Village, LLC and Neicon LLC. The property was a 150,000-square-foot industrial building and a vacant lot. The buyers plan to tear down the building and develop a 500-unit apartment complex as well as 20,000 square feet of commercial space. Chris Ogunrinde of Neighboring Concepts represented the sellers while Carter Siegal of Wood Partners LLC represented Wesley Village. (By Michael Martin)

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