LAS VEGAS (KLAS) — MGM Resorts International announced Monday that it’s entered a $1.65 billion deal with Blackstone, a private equity firm, that owns the Cosmopolitan of Las Vegas resort and casino.
Under the deal, MGM will take over the operations of the Cosmopolitan.
“With over $500 million of capital invested to upgrade the property since 2014, The Cosmopolitan offers an incredible opportunity to expand our customer base and will provide greater depth of choices for our guests in Las Vegas,” said MGM Resorts CFO Jonathan Halkyard. “We believe that we can leverage MGM Resorts’ expertise, operating platform and other highly achievable synergies to continue providing best-in-class service, while driving growth for the property.”
According to an MGM news release, MGM Resorts will enter into a 30-year lease agreement, with three 10-year renewal options. MGM Resorts will pay an initial annual rent of $200 million, escalating annually at 2% for the first 15 years and the greater of 2% or the CPI increase (capped at 3%) thereafter.
Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, Inc. (“BREIT”), will acquire The Cosmopolitan’s real estate assets.
Blackstone has owned the property since 2014.
The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.
The Culinary Union released a statement, saying it looks forward to working with MGM Resorts on this transition.
The Culinary and Bartenders Unions have been the bargaining representative for 2,000 unionized workers at the Cosmopolitan of Las Vegas ever since a union contract was negotiated in December 2015.
Union workers at the Cosmopolitan are protected by a strong union contract, which ensures that workers are retained and their jobs are protected, even if owners or operators change.
Culinary Union contracts include innovative successorship language which mandates that a union contract is in place so that workers have job security, fair wages, the best health benefits, and many more union benefits, regardless of if the property is ever sold.
Culinary Union looks forward to continue working with MGM Resorts to ensure hospitality workers are protected and the contract is followed.Geoconda Argüello-Kline, Culinary Union