Casino news from http://www.philly.com:80/
Nov. 01, 2006
The latest effort to develop a new casino in the $5 billion Atlantic City gambling market is expected to take another step forward today when an investor group closes on an $85 million deal to purchase 11 acres from the Atlantic City Hilton Casino Resort.
Led by former Caesars Entertainment Inc. chief executive officer Wallace R. Barr and by a former head of the New Jersey Casino Reinvestment Development Authority, the group plans to build a small casino with a hotel and retail space on the site along the famed Boardwalk.
"Everything is done on our end. We expect the transaction to close today," said a spokesman for Resorts International Holdings L.L.C., the parent company of the Atlantic City Hilton. The executive spoke on condition of anonymity.
Barr said he had no comment yesterday. Curtis Bashaw, once a close adviser to former Gov. Jim McGreevey and a onetime executive director of the development authority, did not return calls to his office in Cape May, where he runs Cape Advisors Inc., a real estate development company.
The parcel is three blocks south of the Atlantic City Hilton, bounded by Hartford, Atlantic and Trenton Avenues and the Boardwalk. Albany Avenue, or the Route 40 corridor, goes through the middle. It includes the site where other developers had planned to build the Dunes Casino Hotel. That project collapsed, and the partially built structure was demolished in 1991. The land also includes the site of the old Atlantic City High School, which is currently a parking lot.
Two Atlantic City casino executives familiar with the Barr-Bashaw group's plans said the new casino would be comparable in size and amenities to the new Red Rock Casino, Resort & Spa by Station Casinos Inc. in Las Vegas - a property that caters to gamblers who spend more time and money than day-trippers. It would include a hotel, shopping, and multistory parking garage.
The Barr-Bashaw deal is the latest in a string of high-profile efforts to develop new casinos in what is now a multibillion-dollar industry in Atlantic City.
In April, Morgan Stanley acknowledged it was buying 20 acres from North Beach Holdings L.L.C. for $74 million to build a major gambling palace in the South Inlet area next to the Showboat Casino Hotel. The Wall Street firm closed on the land in mid-May.
On Sept. 5, Pinnacle Entertainment Inc. agreed to buy the Sands Casino and adjacent beachfront property from financier Carl Icahn for $250 million. The Sands will close Nov. 11. Pinnacle intends to tear it down and build a billion-dollar casino-hotel.
The land-swapping that has been occurring presages a new round of casino development in a gambling market that has added only one casino in the last 16 years. That was the Borgata Hotel Casino & Spa, which opened in the summer of 2003 and caters to young, affluent customers from New York and Philadelphia.
"It's a good combination of having someone with a strong operating background, being Wally [Barr], and Curtis [Bashaw], who has a real feel for development, and has an entrepreneurial kind of spirit, and has renovated a lot of hotels in Cape May," said Mark Juliano, chief operating officer at Trump Entertainment Resorts Inc., the casino company that owns three casinos in Atlantic City.
About adding a casino to the market, Juliano said: "Anything that adds rooms is good for the city, and we at Trump Plaza and the Trump Taj Mahal, particularly, like to see that development on the Boardwalk."
Yesterday, Trump Entertainment said third-quarter profit rose on an increase in gaming revenue. Net income climbed to $5.83 million, or 19 cents a share, from $3.23 million, or 12 cents a share, for the third quarter a year earlier. Sales grew to $378.2 million from $360.2 million.
"We're encouraged by steady progress, and many of the renovations are still to come," Juliano said, "which will provide us with even more exciting things to offer."
Las Vegas-based Pinnacle yesterday announced the promotion of Cherry Hill native Larry Buck to oversee its casino project in Atlantic City. Buck is vice president and general manager of the company's Belterra Casino Resort in southern Indiana. He will oversee both Belterra and the building of its Atlantic City casino, the company said in a statement.
Pinnacle will release its third-quarter earnings Monday.
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