Business | Tourism
Dubai World could buy Drake Hotel site
US entertainment and hospitality firm MGM Mirage and Dubai World have held discussions about buying the Drake Hotel site from developer Harry Macklowe, a US newspaper reported.
- Staff Report
- Published: 23:39 May 16, 2008
Dubai: US entertainment and hospitality firm MGM Mirage and Dubai World have held discussions about buying the Drake Hotel site from developer Harry Macklowe, a US newspaper reported.
An alliance of Dubai World and billionaire Kirk Kerkorian's MGM would take over the existing $580 million in defaulted debt and interest, making the payments for the 12 months to 18 months until a construction loan is obtained, the New York Post reported on Friday.
The two companies were bidding against offers from other companies.
Macklowe was asking for an additional $200 million for the site, located at East 56th Street and Park Avenue, the paper said citing sources.
Negotiations
"Macklowe has most of the land cleared but is still negotiating with some hold-out commercial tenants in neighbouring townhouses to create a large front door on 57th Street. The deal makes sense for MGM, which has been under pressure from Kerkorian, who owns 53.4 per cent of the company, to diversify away from the gaming business into hotels," the report said.
"There may have been a discussion but it has not gone further than that," MGM spokesman Alan Fieldname was quoted as saying.
A new luxury hotel in New York could become a flagship for MGM and also become a "feeder" to Las Vegas and Foxwoods for MGM's European and Middle Eastern clients.
Last year Dubai World bought shares in MGM and is jointly developing the MGM's 76-acre City Centre development project in Las Vegas.
Dubai World invested over $5.1 billion in MGM. It has since upped its stake to 9.6 per cent of the company.
MGM has also tied up with Abu Dhabi's Mub-adala to develop a resort project in the UAE capital.
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