In April, MGM Mirage (NYSE:MGM) acquired 34 acres of land at the north end of the Las Vegas Strip in a pair of transactions at a price of $17 million per acre, bringing the total development site to 78 acres. Two months later, the company already has plans to develop 40 of those acres.

Wednesday morning, MGM and Kerzner International announced a 50/50 joint venture to develop a multibillion site at the corner of Las Vegas Boulevard and Sahara Avenue. MGM will contribute the 40-acre site to the joint venture, while Kerzner will contribute cash equity to the joint venture, valuing the land at $20 million per acre, representing virtually instant value creation for MGM. The companies anticipate a one-year design phase and three years for construction.

Despite the news, MGM's stock is down 11% to under $77 per share in pre-market trading, as Kirk Kerkorian's Tracinda Corp. -- MGM's majority stockholder -- announced that it has decided to back off negotiations to acquire MGM's Bellagio and Project CityCenter. According to the Wall Street Journal, the land value implied by the MGM-Kerzner announcement reportedly factored into the decision.

The MGM-Kerzner project will be part of the ongoing widespread redevelopment of the north end of the Las Vegas Strip that will include Wynn Resorts' (NASDAQ:WYNN) Encore, Boyd Gaming's (NYSE:BYD) Echelon Place, the Fontainebleau, and a redevelopment of the New Frontier site. Las Vegas Sands' (NYSE:LVS) Palazzo opens later this year on a site adjacent to The Venetian and just south of Wynn Las Vegas.

Fool contributor Jeff Hwang owns shares of Las Vegas Sands. The Fool's disclosure policy plays with a six-deck shoe.