MGM Resorts’ high stakes gamble in the US capital

Mark Willingham Uncategorized

MGM Resorts’ high stakes gamble in the US capital

A casino resort on the banks of the Potomac offers Vegas-style escapism in Washington

Source: FT

by: Matthew Garrahan

December 15, 2016

A wind of change is blowing through Washington, DC – and not just the political hurricane that is Donald Trump. The seat of American power is the home to the three branches of government, the National Mall, Lincoln Memorial and the White House. Drenched in history and tradition it is hardly the first place that springs to mind when thinking of Ocean’s Eleven-style glamour but on December 8 it got its first Las Vegas-style casino resort with the opening of MGM National Harbor on the banks of the Potomac River.

Developed by MGM Resorts, the company behind gigantic Las Vegas properties such as Aria, the Bellagio and the MGM Grand, National Harbor is technically in Maryland, eight miles to the south of downtown Washington in Prince George’s County. But with landmarks such as the Capitol building and the Washington Monument clearly visible from the upper floors of the 24-storey building, it may as well be in the city.

With 308 rooms, the hotel is smaller than comparable casinos in Las Vegas – the MGM Grand has more than 5,000, for example – but the 125,000 sq ft of casino space is similar to its cousins in Nevada. The conservatory off the lobby is packed with 150,000 fresh flowers, while the hotel tower’s sharp points recall the edges of the Washington Monument; the tower was rotated 33 degrees from its original design so it would be parallel with the National Mall. Outside, a large, golden MGM lion guards the entrance to the property while the roof fans out towards the river in a sleek, shining curve that recalls the shape of the Starship Enterprise. Historic Washington this isn’t.

The resort’s opening follows several years of construction and overruns that took the final cost $400m over budget to $1.4bn. The project only became possible following a 2012 referendum in which Maryland voters approved proposals for a new casino in the state (despite the operator of a large casino in nearby West Virginia spending about $40m campaigning for a “no” vote). Four years on I find Jim Murren, MGM’s chief executive, nursing a mineral water in the lobby bar 24 hours before opening night. Getting to this point was worth the wait, he says. “Here we are on the banks of the Potomac, a few miles from our nation’s capital. Three airports are within an hour’s drive and 40m people visit this area every year.”

In other words, there are plenty of potential visitors. Some will be from the Prince George’s County; others might add a night to a stay if they are visiting from out of town or overseas, he suggests. And what do they do when here?

The table games – blackjack, craps, roulette and others – are only part of the story, as MGM and its rivals have realised in Las Vegas, where about 60 per cent of revenues come from non-gaming sources: restaurants, bars, nightclubs and concerts. National Harbor’s 3,000-seat arena will host Bruno Mars, Cher and Sting in the coming months, while its art programme features works by prominent local artists, such as Sam Gilliam, an abstract painter associated with the Washington Color School. One of the other artists on display is not known for his sculpture but has been in the news for winning the Nobel Prize for Literature: Bob Dylan’s “Portal” piece adorns the entrance to the casino and is his first piece on permanent public display. Dylan has sculpted for 30 years but only recently began showing his work. For this piece he welded together metal objects associated with Maryland’s fishing heritage – vices, spanners, wrenches, a boat propeller – into an iron gate that visitors will walk through on their way to the blackjack tables and roulette wheels. The times certainly are a-changin’.

Las Vegas has become a culinary hotspot in recent years, and National Harbor is hoping to emulate that success. Among the resort’s seven restaurants is Marcus, created by Marcus Samuelsson, owner of the Red Rooster in Harlem, where diners can drink bourbon cocktails while funk bands lay down grooves on a dance floor next to the kitchen. Samuelsson, who cooked at Barack Obama’s first White House state dinner, tells me his cooking is inspired by global immigration (he was born in Ethiopia, raised in Sweden and now lives in the US) as well as the “great migration” – the relocation of some 6m African-Americans from the south to the Midwest and north during the 20th century. “They brought jazz and bebop with them,” he says. They brought a food heritage, too: the “yardbird” I order – fried chicken, collard greens and mashed potato – is simple enough but a revelation. “It’s a celebration of comfort food,” Samuelsson says.

Other restaurants include an upscale steakhouse from television chefs the Voltaggio brothers, and Fish, overseen by José Andrés, a renowned Spanish chef who has lived in the DC area for more than 20 years. I catch up with him on the morning of the resort opening when he is clearly in high demand.

“The concept [for the restaurant] was very obvious,” he says, breaking off a loud, highly animated conversation (in Spanish) with a colleague and sitting down. “I’ve been going to the eastern shore to eat amazing crab for a long time and there’s all the seafood culture that Maryland has to offer. I want to do American seafood my way. You will get a great clam chowder or you will have a great crab cake?.?.?.?I want to respect [these dishes] as much as I can.”

Andrés, who trained under El Bulli’s Ferran Adrià, was supposed to open two restaurants in the region this year: Fish and another project at the Old Post Office site in downtown Washington. The building was redeveloped as a hotel this year by the president-elect himself but in the summer of 2015 Andrés decided that he couldn’t go ahead. Donald Trump had just given what would become an infamous speech in which he accused Mexican immigrants of being rapists, criminals and drug dealers. Andrés pulled out of the project; Trump sued him so Andrés countersued.

“It’s the first time in my life that I’ve been sued,” he says, in disbelief. And by the new president, too, I say. How does that feel? He insists he’s not worried; his lawyers are “trying to find a settlement”.

Does he think Trump should apologise for his comments about immigrants? “What makes us human and true leaders is the moment we can apologise to others,” he says. “I’m not implying that only the president-elect should be doing that. Everyone should do it.”

Chefs Michael Voltaggio, José Andrés, Marcus Samuelsson, Bryan Voltaggio and Jason Johnston

His decision to pull out was purely a business one, he adds. “I’m an immigrant and have been in America 24 years. Unemployment is at its lowest rate in 10 to 20 years. It’s hard to hire people! So I cannot have people telling Americans that immigrants are stealing their jobs. I think we need to be more pragmatic in the stories we tell about America. People want to make more money, and rightfully so, but please don’t harm immigrants by saying they are stealing your jobs.”

Jobs were a big factor in selling National Harbor to the voters of Maryland. The development created 4,000 full-time jobs – Jim Murren says the company had 40,000 applications – while 6,000 more worked on the construction. The casino industry employs more people in the US than the steel industry, he tells me, and more than work for US airlines. And yet it is still stigmatised: concerns over problem gambling mean that when US states have approved casino gaming in recent years they tend to ensure developments are kept far from city centres. It is often seen as a last resort for cash-strapped states eager for tax revenue.

National Harbor challenges those assumptions – not only is it close to a city but that city happens to be Washington, DC. “If we’re right, this could be a model for future destinations,” Jim Murren says. The key is the quality of food and entertainment, he says, because MGM is “not interested” in operating slot-machine barns.

People are starting to arrive for opening night and when the doors open at 11pm thousands are lined up, keen for a peek at Washington’s newest attraction. There is a month to go before the Trump circus arrives in town to take on that mantle. Vegas on the Potomac should give him a run for his money.