Atlantic City's Trump Plaza goes for US$20 mil.
By Wayne Parry, AP
February 16, 2013, 12:04 am TWN
ATLANTIC CITY, New Jersey--Trump Plaza, the Boardwalk centerpiece of Donald Trump's onetime Atlantic City empire, was sold Thursday to a California company for US$20 million in the cheapest of a series of bargain-basement deals for distressed gambling halls in the struggling New Jersey seaside resort.
The Meruelo Group of Downey, California, plans to close the deal by May 31. It is the lowest price ever paid for a casino in Atlantic City.
The company has not decided on a new name for the casino-resort, but said it will not continue to use the Trump name.
The Meruelo Group, which counts construction, engineering, real estate, food service and private equity among its businesses, also owns the Grand Sierra Resort and casino in Reno, Nevada.
“Trump Plaza is one of the world's most recognized gaming resort destinations and is an integral part of the Atlantic City landscape,” said Alex Meruelo, founder and CEO of the Meruelo Group. “Our company is thrilled to have the opportunity to become the new owners of this property, and we are firmly committed toward establishing it as one of the elite destinations in Atlantic City and on the East Coast.”
Robert Griffin, CEO of Trump Entertainment Resorts, told The Associated Press the deal shows the Atlantic City market is still attractive to investors, given the right price.
“This is good news for the city, for the state, and for the Plaza,” he said. “There is still considerable interest in this market.”
Xavier Gutierrez, chief investment officer for The Meruelo Group, said the company plans to make a sizeable investment into the property, but could not yet predict what staffing levels would be.
The sale is subject to approval by New Jersey casino regulators.
The bargain-basement sale came as Atlantic City celebrated a rare bright spot — that the Miss America pageant would return this year several years after abandoning the East Coast for Las Vegas.
Trump Plaza has about 900 employees. The president of the union representing most of them welcomed the sale.
“We're pleased somebody had the foresight to purchase this property; it's right in the center of Atlantic City,” said Bob McDevitt, president of Local 54 of the Unite-HERE union. “We have a very good relationship with this company in Reno and we have a contract with them.
“Because of Trump Entertainment's problems, they really weren't able to run (Trump Plaza) the way it needed to be run,” he said. “It's been in hibernation.”
Trump Plaza, which cost US$210 million to build, opened in May 1984 as one of Donald Trump's pet projects. The real estate mogul has since limited his dealings in Atlantic City to a 10-percent stake in Trump Entertainment Resorts.
Trump told The Associated Press he is a bit wistful to see his former properties in Atlantic City sold off and renamed.
“There was a period of time when Atlantic City was the hottest place in the world,” he said. “I got out years ago, and my timing was very good. But the world turns. They're getting a very good location.”
The sale leaves the company he once ran, Trump Entertainment Resorts, with just one casino, the Trump Taj Mahal Casino Resort.
Trump Entertainment Resorts plans to use proceeds from the Plaza sale to pay down its debt, which will be about US$270 million after the sale, Griffin said.