Tuesday, December 16, 2008

Fed Cuts Benchmark Interest Rate to Record Low

WASHINGTON, DC, Dec. 16, 2008—The 10-member board of governors at the Federal Reserve Bank stunned financial analysts and market watchers today by lowering the benchmark interest rate to zero to one-quarter percent. The previous record low rate was 1 percent.

The rates statement by the Federal Open Market Committee conceded that an even lower rate might be set in the near future.

“…Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” according to the one-page statement.

In the prepared statement, Federal Reserve Chairman Ben S. Bernanke (top right photo) said the unprecedented low rate was set by the governors because “labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment and industrial production have declined.”

To boost the commercial and residential real estate industries, the Fed promised, “over the next few quarters, to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it (also) stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant.”

Small businesses and households were also promised some financial relief by early next year. At that time, the Fed will use a portion of the $700 billion Congress-approved Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses,” according to the statement.

“Financial markets remain quite strained and credit conditions tight,” the statement said. “Overall, the outlook for economic activity has weakened further.”

However, there was a sliver of good news.

“Inflationary pressures have diminished appreciably,” the Fed board believes. “In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.”

The Fed promised to “employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.”

The statement said “the focus of the Committee’s policy, going forward, will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve’s balance sheet at a high level.”

The Committee is also “evaluating the potential benefits of purchasing longer-term Treasury securities.”

In a related action, the board of governors unanimously approved a 75-basis-point decrease to the 1.25 percent Federal Discount Rate to ½ percent.

The board also established interest rates on required and excess reserve balances of ¼ percent.

Voting for the benchmark interest rate decrease today were nationally-known banking figures that included seven men and three women.

They were Chairman Bernanke, Christine M. Cumming, (top left photo) Elizabeth A. Duke,(middle right photo) Richard W. Fisher, Donald L. Kohn, Randall S. Kroszner, Sandra Pianalto, (bottom left photo) Charles I. Plosser, Gary H. Stern and Kevin M. Warsh.

MGM MIRAGE to sell Treasure Island

LAS VEGAS, NV -- MGM MIRAGE (NYSE: MGM) and Ruffin Acquisition, LLC have entered into an agreement whereby MGM MIRAGE, through its wholly-owned subsidiary The Mirage Casino-Hotel, will sell Treasure Island Hotel & Casino ("TI") (top right photo) to Ruffin Acquisition, LLC for $775 million.

Ruffin Acquisition, LLC is wholly owned by Phil Ruffin. (bottom left photo, on right, chatting with developer Donald Trump at an unrelated event.)

The purchase price is to be paid at closing as follows: $500 million in cash and $275 million in secured notes bearing interest at 10%, with $100 million payable not later than 175 days after closing and $175 million payable not later than 24 months after closing.

The notes, to be issued by Ruffin Acquisition, LLC, will be secured by the assets of TI and will be senior to any other financing.

The transaction is subject to customary closing conditions contained in the purchase agreement, including receipt of necessary regulatory and governmental approvals. The parties expect the transaction to close by the end of the second quarter of 2009. MGM MIRAGE expects to report a substantial gain on the sale.

MGM MIRAGE acquired TI as part of the merger between MGM Grand, Inc. and Mirage Resorts, Incorporated in May 2000.

"We are extremely proud of the accomplishments of Treasure Island's employees and management team in making it one of the must-see properties in Las Vegas," said James J. Murren, (middle right photo) Chairman and Chief Executive Officer of MGM MIRAGE.

"We are pleased to have been able to work with Phil Ruffin, a known and trusted community partner. This transaction creates value to our stakeholders through significantly increased liquidity and enhanced financial flexibility."

TI is located on the Las Vegas Strip and features 2,885 guest rooms and suites, approximately 90,000 square feet of gaming space, several fine and casual dining outlets, The Sirens of TI -- the iconic pirate battle attraction, and Mystere, the first permanent production in Las Vegas by Cirque du Soleil.

"We are very excited to be in a position to acquire such a stellar property in Treasure Island," said Mr. Ruffin. "The property is in pristine condition, ideally located in the heart of the Strip and benefits from a wonderful team of outstanding employees.

" We are financially positioned to close on this transaction once all of the necessary approvals have been received," Mr. Ruffin noted.

MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected development companies with significant holdings in gaming, hospitality and entertainment, owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau.

MGM MIRAGE is developing major casino and non-casino resorts, separately and with partners in Las Vegas, Atlantic City, the People's Republic of China and Abu Dhabi, U.A.E.

MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE has received numerous awards and recognitions for its industry-leading Diversity Initiative and its community philanthropy programs.

For more information about MGM MIRAGE, please visit the company's website at http://www.mgmmirage.com/.


Investment Community, Dan D'Arrigo, EVP & Chief FinancialOfficer, +1-702-693-8895, or

Media, Alan M. Feldman, Senior Vice President of Public Affairs, +1-702-650-6947, afeldman@mirage.com, both of MGM MIRAGE

CB Richard Ellis Secures Long-Awaited Movie Theater Lease at The Plaza in Downtown Orlando

ORLANDO, FL, Dec. 16, 2008 – The Orlando office of CB Richard Ellis is pleased to announce the completion of a 12 screen movie theater lease to anchor The Plaza (top right photo) mixed-use development within Downtown Orlando.

The Plaza is at the intersection of Orange Ave. and Church St. in the core of the Downtown area.

CB Richard Ellis brokers Bobby Palta, (top left photo) Senior Associate, and Wood Belcher, (middle right photo) First Vice President, procured and negotiated the lease with the new theater tenant, Atlanta-based American Theater Corporation.

The 57,000 sq. ft. lease will be for a 15-year initial terms plus options. The lease was signed in September but contained several contingencies including the recent City Council vote.

The vision for a Downtown movie theater began with the City of Orlando in the early 2000s. Construction started on The Plaza in 2004 with a theater opening planned for 2006 under a management agreement only, however several financial obstacles with the former owner impeded the entire project.

RP Realty Partners purchased the retail portion of The Plaza from the developer as well as the parking garage from its lender in a foreclosure sale in 2007 and 2008. In April 2008, RP Realty Partners hired CB Richard Ellis to lease the remaining retail space within The Plaza including the partially completed second floor movie theater space.

The Orlando City Council vote on December 15 represented a major milestone for the property owners and citizens of Orlando. The City Council voted to approve two funding agreements providing loans of $6 million to The Plaza owners to be repaid exclusively using special tax assessments on its properties.

This will allow construction to resume on the theater space immediately with funding contingent on a Certificate of Occupancy on or before July 1, 2009.

"We are very pleased to have completed this remarkable transaction, which is of major economic importance to our clients RP Realty Partners," says Palta and Belcher.

"It was very complex given the problems with the previous developer and current economic climate. We are excited that the citizens of Central Florida will now be able to enjoy this first-class theater when it opens this summer."

The theater will have 12 screens, two of which will feature digital high-definition – a first for Central Florida. The Plaza Theater will show mostly 'First Run Films' along with independent, art and foreign films.

Major televised sporting events will also be shown in addition to opportunities for corporate events. Beginning in November 2009, The Plaza Theater will be the new home to the Orlando Film Festival, currently in its third year.

Unique to the Plaza Theater will be the full menu of concessions, including hot entrees, beer and wine.

Under the new ownership, the buildout of the lobby, theaters and two wine bars have been upgraded to an upscale, modern look.

The theater chairs will be wide stadium recliners with 10-inch tables between the chairs. Attendance at the theaters is estimated between 500,000 and 600,000 patrons annually, impacting existing tenants within The Plaza and throughout Downtown Orlando.

RP Realty Partners is in final bidding for the construction and is dedicated to using local contractors. Upon opening, the Plaza Theater will create more than 100 new jobs within the cinema alone. The economic impact within the immediate area of Downtown Orlando is conservatively estimated at $12 million annually.

Contact: Angelique Greven, 407.839.3158, angelique.greven@cbre.com