MGM Mirage might be the largest gaming operator on the Vegas strip — with properties such as the MGM Grand Las Vegas, Bellagio and Mandalay Bay — but Chief Financial Officer Jim Murren would rather talk about other real estate opportunities in Las Vegas.

„Here is this community that’s grown to 1.6 million people and yet we don’t have a city (center),“ he said. „Billions and billions of dollars over the next 10 years will be injected into this market by ourselves and outside investors. We’re going to literally build a new city.“

MGM Mirage’s (NYSE:MGM – News) planned $ 7 billion Project CityCenter, on 66 acres of land it owns next to the Bellagio, will be at the epicenter of it.

„It is the largest construction project in the U.S. under way right now by a private corporation,“ Murren said.

Expected to open in 2009, it’ll include 3,000 luxury condos and plenty of retail and entertainment — about half a million square feet in total. Two of the three planned hotels won’t have any casinos at all. A growing number of customers have no interest in gaming anyway, Murren says.

„For us to continue to grow, we need to continue to reach out and appeal to a broader pool of people,“ he said.

More than half of MGM Mirage’s revenue comes from noncasino business such as rooms, food and beverage, entertainment and retail.

In the first quarter, casino revenue grew 38% from the prior year to $ 847 million. Noncasino revenue gained 68% to $ 1.2 billion.

Gaming revenue on a same-store comparison, which doesn’t include new rooms, rose 2%. Nongaming revenue in same-store facilities increased 5%. With promotional allowances factored in, total revenue grew 56% to $ 1.9 billion.

Continuing more than two years of double-digit quarterly profit gains, MGM Mirage’s first-quarter earnings moved up 27% to 56 cents a share. First Call analysts estimate earnings for the year will climb 23% to $ 1.99 a a share.

„If I’m right about Las Vegas evolving from a resort destination to a metro market of which tourism is a major part — as it is in New York and Orlando — no company can benefit more than us,“ Murren said.

Not only does MGM Mirage control the biggest block of rooms in Vegas, but it also owns the most land — 831 acres, all on the Strip. Another 358 acres can still be further developed, Murren says.

Company execs told analysts they could „buy down risk“ in CityCenter by selling pieces of it over time if necessary.

Proceeds from condo sales at CityCenter already are expected to pay $ 3 billion of the $ 7 billion in overall development costs.

Towers Of Power

MGM Mirage isn’t new to the residential real estate market in Las Vegas. Two new condo-hotel towers are located on its MGM Grand casino property, and a third is under construction.

The towers feature 576 units. Two of the towers are sold out, while about 80% of the units in the third tower have been sold.

The condo-hotel towers are joint ventures with Turnberry Associates, so MGM Grand Mirage shares profits from unit sales.

When owners close on their units, they can choose to put them into a MGM Grand Mirage rental program. The company says about 80% of the owners plan to put their condos into the rental pool.

MGM Grand Mirage will get fees for renting out the units to visitors. The company has not disclosed the fee structure, though Murren said it’s a „50-50 kind of deal.“

Big Macau

All the attention to real estate notwithstanding, analysts say the company’s core gaming resorts remain its biggest draw.

„With real estate, they don’t resell again and again,“ said Lawrence Klatzkin, analyst with Jefferies & Co. „The gaming is there long term.“

Of the three hotels ready to go up at CityCenter, the largest is the casino resort, a 4,000-room property designed by architect Cesar Pelli.

Globally, MGM Mirage’s gaming resort opportunities stretch all the way to the tiny enclave of Macau by the south China coast. The firm has a 50% interest in the MGM Grand Macau now under construction.

„Macau is the hottest gaming market in the world now,“ Klatzkin said.

Compared to rapidly growing international markets, gaming in the U.S. is a relatively mature market, Murren says.

„Macau is already larger than Las Vegas in terms of gaming revenue and it’s projected to triple in size over the next 10 years,“ he said. „We’ll be a major part of that.“

Meantime, the company continues to add to its U.S. gaming operations, including investments in a permanent casino at the MGM Grand Detroit and a joint venture with the Mashantucket Pequot Tribal Nation at Foxwoods in Connecticut.

And after Hurricane Katrina, MGM Mirage moved quickly to rebuild the Beau Rivage casino operations in Biloxi, Miss.