This excerpt taken from the WYNN 8-K filed Sep 11, 2009.
Encore at Wynn Macau
We are in the process of constructing Encore at Wynn Macau. While the new resort will be a destination in itself, it will also be complemented by and fully integrated with the existing operations at Wynn Macau. We believe we will further solidify Wynn Macaus position as a premier destination for VIP clients in Macau as well as enhance our offerings to premium mass market clients with the addition of Encore at Wynn Macaus:
We expect to open Encore at Wynn Macau in the first half of 2010. The total budget is approximately HK$5,037.4 million, including amounts under the guaranteed maximum price construction contract of HK$3,131.8 million representing the major hard construction costs. As at 30 June 2009, approximately HK$2,398.2 million of construction costs had been incurred and completion of the project is funded through a combination of existing cash balances and cash flow from operations. With the expansion of Wynn Macau and the opening of Encore at Wynn Macau, Wynn Macaus aggregate VIP table games will increase from approximately 149 to approximately 215 tables, an increase of 44%, allowing us to serve additional junket-driven and in-house VIP gaming.
Cotai and Other Opportunities
We have identified a site of approximately 52 acres in Cotai and Palo Real Estate Company Limited (which will be our indirect wholly owned subsidiary at the time of the completion of the Reorganization) has submitted an application to the Macau government to obtain the right to lease this parcel; no payments or deposits were made to the Macau government when submitting the application. We are awaiting final approval of this application. The application, if approved, would allow us to construct an integrated casino and five-star resort of up to approximately 4.8 million square feet (including space for gaming, accommodation, food and beverage, retail, leisure and convention/meeting areas).
THIS INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. This Information Pack must be read in conjunction with the section headed Warning on the cover of this Information Pack.
On 1 August 2008, Palo Real Estate Company Limited entered into an agreement with Tien Chiao, to make a one-time payment in the amount of US$50 million (HK$387.5 million) in consideration of the latters relinquishment of certain rights with respect to its business interests in the potential Cotai project.
We have not decided whether we will proceed with the potential Cotai project. No construction timeline, budget or capital expenditure estimate has been made and no funding arrangements have been put in place for the potential Cotai project. The application submitted does not contain any binding undertakings or conditions with respect to the potential project. The proposed draft land concession agreement prepared by the Macau government in connection with the application contains several undertakings and conditions standard for any land concession in Macau, including the obligation to develop the land within a certain period of time, in this case, the development and construction of a hotel complex of a certain size within five years, but such proposals have not yet been finalized with the Macau government and are not binding. Thus, the specific parameters of any potential Cotai project, including whether such project is to be built at all, are subject to change.
We believe our managements experience, disciplined approach to development and prudent capital management put us in a strong position to evaluate Macaus evolving gaming market and selectively take advantage of opportunities in Cotai and elsewhere in Macau.