2/15/2013 6:10 PM ET|
Donald Trump sells his casino for a song
The Donald's departure, the new ownership at Trump Plaza and the return of Miss America could end the slumping gaming mecca's losing streak.
Trump Plaza, the casino Trump opened in 1984 by spending to $210 million to hitch a tower to an abandoned Holiday Inn on the boardwalk and deck out the whole thing, was sold to the Meruelo Group for a scant $20 million. It's the lowest price ever paid for a casino in Atlantic City and will only put a slight dent in the $270 million debt of parent company Trump Entertainment Resorts, which Donald Trump only has a 10% stake in.
Coupled with the announcement that the Miss America pageant will come back to Atlantic City after six years in Las Vegas, it was a double dose of good news for a town badly in need of some.
Hurricane Sandy ripped into the boardwalk and shuttered casinos for nearly a week. Gambling revenue has declined from its peak of $5 billion in 2006 to just $3.1 billion last year as casinos in Pennsylvania, Delaware and Connecticut took larger pieces of the action. In 2012, Pennsylvania's $3.2 billion in gaming revenue eclipsed New Jersey's for the first time and moved the Keystone State into second place behind Nevada's more than $10 billion, according to The Press Of Atlantic City.
So how is the bargain-basement sale of a casino good news for the town? Just ask the Trump Plaza's workers, who like the look of what the Meruelo Group's Grand Sierra Resort and Casino in Reno, Nev.
"Because of Trump Entertainment's problems, they really weren't able to run (Trump Plaza) the way it needed to be run," Bob McDevitt, president of Local 54 of the Unite-HERE union representing most of the casino's 900 workers, told The Associated Press. "It's been in hibernation."
Trump himself doesn't seem too fazed by the sale, despite the fact that the casino went for the cost of a story of any of the tower properties in his portfolio. The price is also only about twice what he paid for his sprawling Mar-A-Lago estate in Palm Beach in 1985 and may not be far from what he spent to gild his Trump Tower penthouse in Manhattan that was featured in Refinery 29 a year ago.
"There was a period of time when Atlantic City was the hottest place in the world," Trump told AP. "I got out years ago, and my timing was very good. But the world turns. They're getting a very good location."
Even Robert Griffin, the CEO of Trump Entertainment Resorts who sold off Atlantic City's Trump Marina in 2011 for $38 million and is listening to offers for his company's last Atlantic City property -- the Trump Taj Mahal -- sees the Plaza's sale as a positive development “for the city, the state and The Plaza” that shows “considerable interest in this market.”
It would be tough for it to get any worse for the Plaza, which was one of the smallest casinos in Atlantic City at 906 rooms and whose $102 million in revenue in 2012 is what Atlantic City's top casino makes in its two strongest months. Winnings were down 25% last year and profits cratered by 34%. The place could use some good luck, and some new faces paying the bills may be just what the Plaza needs to stop its losing streak.
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