MGM Cotai: building the ‘Mega-Project’

With the recent opening of Wynn Palace, and The Parisian slated for later this month, Business Daily sat down with Executive Vice President for MGM Resorts Development, Hunter Clayton for a look inside MGM Cotai’s new eco-friendly mega-project, winner of the China Green Building (Macau) Design Label. We’ve heard that you’ve been called ‘The Construction Guy’. How did that come about? I’m schooled as an architect but I did a dual degree in architecture and also construction management. I started my career 27 or 26 years ago working for a program manager, and although I came out of school as an architect, I went straight into program and construction management. Then I transitioned over to an architectural firm and spent about 12 years there as an architect. [I] tied in with MGM [during] the last five years of my term with the architectural [firm] working on City Center, which is a 20 million square foot integrated resort in Vegas, so that’s where my relationship with MGM started. Was the Macau project new or different for you? My career has been focused on international development. I’ve probably built more square footage outside of the [United] States than in the [United] States. I’ve been in the Middle East, I’ve been in North Africa, Asia, Europe, India – I’ve built kind of all over the world, so Macau for me was, especially with this scale, this kind of intriguing architecture, it was something that I was very interested in participating in. It’s a beautiful building. The suite of consultants that we have are world-class […] and having an opportunity to build something that’s multi-million square feet and multi-billion dollars worth of construction, they’re few and far between these days, so I jumped at the chance. How many people do you oversee? Within my project team we’ve got 68 individuals and they are a mixture of local Macanese, a few folks from the States, we’ve got South Africans, Australians, Hong Kong Chinese, Mainland Chinese, so across the board, it’s a very diverse group. Would you say MGM is committed to sustainable development? We’re a world-class, world-renowned, large hospitality company, but we’re also a development company. So designing and constructing buildings is part of our core. We have mandates, all the way from the chairman down to everyone within our company, to carry sustainability design practices and construction practices, at every level. Was it a challenge applying that to Macau given the difficulty in sourcing materials? Applying those same principles locally, the challenge was specifying material and tracking that material to make sure that it’s confirmed to be sustainable and it’s installed as sustainable. We have so many checks and balances in place within our processes that, I wouldn’t say it’s easy for us, but we’re very good at it. One of the elements of the award is land usage. How is that evaluated? For us, it’s maximizing the use of your allocated land. We have – just over, just under – 16 acres, and including parking we’re over four million square feet. And frankly we’re also, I don’t know how many people know this, we actually have a three-level underground basement. We have the deepest excavation, the deepest basement provision in Cotai, and being able to dig that deep, which truly was a challenge because of the groundwater and the soil condition, we were able to maximize that underground space and literally maximize the use of that land so we’re not sprawling. Being compact and dense within that 16-acre footprint allowed us to stay efficient with that land use. By using eco-friendly measures, have you saved money in the long run? Absolutely. As we are installing and commissioning today, we are just under 30 per cent in energy savings over a standard building system. I don’t have the figures with me, but year-on-year utility cost savings as a company are millions of dollars. It’s definitely a cost-effective way to do it. Is this a big, small, medium-sized project for you? This is a big project. The biggest project that I have delivered was City Center in Las Vegas, 20 million square feet and a total construction value of US$7 billion. We are north of 4 million [square feet] including parking here, and we are in the US$3 billion range for construction value. We call it a mega project. It’s absolutely a large, complex, challenging, project – and exciting. In other projects, you’ve used cisterns to collect rainwater. Is that something you can do here? It absolutely is, in fact, with the amount of rainfall in Macau, any ability to manage storm water is a great opportunity and we analysed it at length. Our challenge within our project is that, comparably, we’ve got a very small site and there are a couple of other points within the MGBL [Macau Green Building Label] matrix and it was almost a trade-off. For example to achieve storm water management or retention, you literally build these massive cisterns like we did in MGM National Harbour, but we didn’t really have the space to do that because of the size of our site, and the trade-off was, we wanted to maximize underground occupied space. So we gave up the ability to store storm water for occupied underground space. The reason we did that is it gives us a much better, more efficient heat-load management. Peak summer you’ve got spaces that are underground and they take less cooling to be able to occupy. Is something like a large fountain wasteful? We do have some water features. We’ve kept them smaller scale and we use reclaimed water to service them, to supply them, so you can do it without it being a wasteful endeavour. Do you find that the local community is experienced and understand eco-friendly technology? Are there improvements that can be made? The way we’ve built our team, we’ve got a good number of local Macanese architects and engineers and construction managers as part of our team, and frankly our delivery of the building in its design and construction and meeting these principles has been a pleasure. The level of intelligence, the talent of the architects and engineers that work as part of our team, the work ethic, I don’t think I’ve ever come across a group that has worked longer hours and had more focus and motivation to deliver a great product than I’ve experienced here in Macau. To the point where I’d be more than happy to take this team and go to do other buildings elsewhere in the world. They’re that good. So I would say yes, the local Macanese community has not only embraced sustainability, it’s easy to think that as we go forward and as the MGBL continues to grow, it will become part of their DNA and culture as well. Are there any unusual elements that are part of this project, such as using captured CO2 emissions and mixing them into the concrete as in the MGM National Harbour project? The utilisation of concrete as a building material here is far more advanced than it is in the States. The makeup of the concrete as a material and the contractors that form the concrete, pour the concrete, cure it, they’re probably better at that than anywhere that I’ve experienced. So we learned a thing or two from the folks that actually put together the concrete mix. So we saw a lot of creative means and methods using, what I’d say, is a foreign material to us, that the local market simply just had a much stronger command of. How long do these materials last? For life expectancy, the building itself, its kind of core elements, can easily last 100 plus years, but then you’ve got a maintenance and replacement program for those other things, like a roof. A roof typically will last you 20 years. A curtain wall, with proper maintenance would last you 30 years. So it’s kind of a varying scale depending on what you’re talking about. How resistant is the building to typhoons? Is there any maximum level or wind speed it can take? There is and it’s usually 120 kilometres an hour. There’s certain local codes that we adhere to and definitely the Macau building code caters for buildings to withstand very large typhoons. And luckily they do. Were there any natural conditions that made your job easier? Mild winters make it easier. One of our challenges in [MGM] National Harbour, is that it’s in the state of Maryland, and the building – pouring concrete, placing steel – in wintertime is very slow going. Not having to deal with snow and ice in the winter in Macau helps tremendously, although managing water during a typhoon on a construction site isn’t the easiest thing to do either. In the case of the peak period, with multiple projects happening at once, do you have an escape valve? You know the Macau labour laws and the ratios, but it’s manageable. What’s really important is understanding what the limitations are on those resources. We all understand as we start a project where the peak will come, and we know where those resources will be overleveraged. So you establish a schedule and you establish what I call a ‘critical path’ sequencing of the project, accounting for what you know to be your allotment of that labour. How much margin for error do you have to put in from the beginning, to be able to know that you can at least meet deadlines? Depending on what you’re analysing, a safety factor can be anywhere from five per cent to 25 per cent. And it’s interesting because we actually did the initial concept and we understood exactly how our building maximum was going to be. We did a construction sequencing video model that literally built from digging the hole, drilling the foundations, all the way up to completing the tower, cladding the tower, and cladding the podium, and we’re doing a time-lapse of the building’s construction now and you can literally play the video that we did four and a half years ago, do the time-lapse and they look very similar. In what ways do they vary? They vary in my ability to speed up the video to make it go faster and my inability to speed up the actual construction. In terms of completion, how far do you think you are? From a construction standpoint we’re at the mid-60 per cent level. Do you expect that there’s going to be any period where you can accelerate or decelerate? Effectively we’re accelerating everywhere that we have the opportunity to do so. The only deceleration will be, as we approach completion we can start demobilizing trades that are finished with their work. When you’re not here, are you working on projects in the U.S.? MGM National Harbour completes later this year so that’s one that we continue to spend time on and we have another casino project that’s under construction in Springfield, Massachusetts. I’m part of our core corporate development team, so I’ve got responsibility on both of those projects that I keep an eye on, but this is my primary focus. In fact, being here full-time, I manage critical aspects of those two projects more remotely, and we’ve got teams there and other project leads that pick up the slack so that I can focus my attention here full-time. As part of the Macau Green Building Label criteria it notes that the ‘building shape and façade have to be plain and simple’. How did you manage with that? For us we actually met that criteria and it was primarily because of the way our architecture is masked. It’s stacked boxes, which is fairly simple and it’s not in-your-face, high glare, neon, spotlight kind of active movement. It’s really meant to be subtle architecture. But subtle architecture is kind of a subjective term when you’re building along the Cotai strip in Macau. But we’re elegant I guess is the best way to put it – again as a subjective term – but I think for everyone who looks at our buildings and compares it to the context that we’re in, it meets the criteria. As with most industries, people in the construction industry tend to know each other. Do you see each other in the industry as competition or do you share good ideas with each other? Early on when I came to Macau and [was] trying to understand local means and methods and what’s the best way to approach delivering a project like this, I’ve got colleagues that were part of our competitors that received me and we sat down and shared notes on lessons that they’d learned, and things that they pointed out that would actually improve our chances of pushing through. It’s good to have a neighbour that you can rely on, and each of our properties are different enough to where they compliment each other and it makes for a pretty cool suite of resorts. It’s a good environment to be in. Healthy competition is good for any industry. Is there an advantage to building an economy of scale by investing in the companies that are producing the materials that you use? The better way to look at it is – to enhance that market so that there are multiple manufacturers that do the same thing. It’s about economic growth in an environmentally responsible way. Replenish-able materials, being able to use products that you take and you consume and you use, but it’s the type of a product that five years from now it replenishes itself; whether it’s a fast-growing pine tree or some other type of recyclable or reusable material. Just looking across every part of our industry and finding ways of maximizing those markets so that everyone stays competitive and everyone can make a little bit of money on that type of growth in that market or industry – it’s better for all of us. Does the China market hold more opportunities in that sense? It’s certainly bigger. The natural resources in China, just because of the vastness of China, there’s plenty of opportunity there. And more and more these days, we see those types of products becoming more available within that China market.