MGM Mirage To Build In China's Armpit

MGM Mirage announced this morning a joint venture with a Chinese company to build a mixed use facility in Tianjin, a very industrial port city about an hour from Beijing. The plan includes two towers that includes a luxury hotel, residential units, a spa and, of course, convention space. Oh, and a 350-room MGM Grand Tianjin plus 50 SkyLofts and 60 residences.

What will definitely be missing? GAMING! The Chinese government won't allow it anywhere other than Macau, at least not yet. Hence we have the MGM Mirage's first step towards moving on globally from casinos. Remember, CEO Terry Lanni recently suggested they might split the company and have one arm focused on hospitality? This would seem like the first significant stop, which surprises me because I thought they'd build some more MGM Grands in the U.S. first.

But here's the real thing. I've been to Tianjin. It's a gross place. Awful. See? Polluted like Beijing, but no culture, no important historic monuments, nothing but an overcrowded port. The third biggest urban area in China, with 10.2 million people. Evidently the city is so low on the totem that, while the 2008 Olympics are being shared amongst several lovely northeastern Chinese cities including my favorite, Qingdao, (home of the Tsingtao brewery, yay!), Tianjin gets just one small role, some early-round soccer matches. I will admit that the Olympic stadium built there does look sensational -- in renderings.

I even have a Starbucks mug from Tianjin from which I am sipping my morning coffee. I love it. That's the best thing I can say about the town. The reason you've never heard of it is because there is nothing touristy about Tianjin. It would be like opening up in Trenton.

So why, why, why is MGM Mirage staking their first overseas non-gaming venture there? I don't mean to doubt the potential profits to be had and I suspect the city has offered an unbeatable tax deal given that this could put the place on the map for the West in a small way. But if they wanted to make a splash, why not Beijing or Shanghai or Xi'an first? Maybe even an MGM Grand Lhasa?

I'm sure they've done their market research and the level of development and investment isn't really that huge, especially at Chinese labor prices, but I'm just puzzled they couldn't come up with something more glamorous out of the gate.