A Las Vegas-based company’s long-running attempts to sell a prime piece of casino-zoned land in the heart of the Boardwalk may drag on for a few more months.
Pinnacle Entertainment Inc. has been trying to unload the 20-acre oceanfront parcel since it abandoned plans in 2010 to build a $1.5 billion megaresort on the property.
Pinnacle disclosed in a securities filing last fall that it had reached a letter of intent with an unidentified buyer and expected to close the sale by the end of 2012. With that timetable long since passed, Atlantic City officials say they understand the deal has been delayed.
“There is a rumor that it has been pushed back months,” said Liza Cartmell, president of the Atlantic City Alliance, a marketing coalition funded by casinos.
In the meantime, the property will remain as a temporary public art display featuring sculpture work, a faux pirate ship and inspirational messages amid a parklike setting.
Whether Pinnacle has encountered only a slight delay in selling the land or a more serious problem is unclear. Company spokeswoman Kerry Andersen declined to comment other than to refer to what Pinnacle has previously said in its filings with the federal Securities and Exchange Commission.
On Nov. 9, Pinnacle said in one document, “We have entered into a letter of intent to dispose of our land holdings in Atlantic City and expect to enter into a definitive agreement by the end of the fourth quarter of 2012.”
The sale has been shrouded in secrecy. Pinnacle’s real estate broker, Jones Lang LaSalle, has repeatedly declined comment in recent months. When the sale began in 2010, a Jones Lang LaSalle executive made the extraordinary statement that Pinnacle would probably have to accept just 30 percent of the $270 million that it paid for the site in 2006, at the height of the Atlantic City real estate market.
Joshua Levin, a commercial real estate broker in Atlantic City, said he heard a New York investor has agreed to pay Pinnacle $30 million. The person’s name has not yet been disclosed.
Levin said he is anxious to learn the identity of the buyer because Levin represents a client who wants to acquire some of the outlying property that is part of the Pinnacle site.
“There are a lot of outlying parcels that could be sold off or developed,” Levin said.
Cartmell said the purchaser apparently has no immediate plans to redevelop the Pinnacle site, preferring instead to follow a “buy and hold strategy.”
“The expectation is that at some point, that lot will be developed. We don’t know when,” she said.
Cartmell’s Atlantic City Alliance teamed up with the state Casino Reinvestment Development Authority last year to transform the site into a public art display crafted by New York art curator Lance Fung. The art display, however, is only supposed to be temporary. Once the property is ready for development, the art work will be removed.
“As much as I love the art project, the idea is to have development there,” Cartmell said.
Pinnacle once had grand plans for the land, the former site of the old Sands Casino Hotel. In 2006, Pinnacle bought the Sands for $270 million and imploded it the following year to make room for what was supposed to be a lavish, Las Vegas-style casino resort costing $1.5 billion to $2 billion.
As the economy grew worse and Atlantic City’s casino industry fell into a prolonged slump, Pinnacle killed the project and made the decision to sell the property.
Most of the site consists of the old Sands property, a supersized block bordered by Indiana Avenue, Pacific Avenue, Dr. Martin Luther King Jr. Boulevard and the Boardwalk. There are other smaller, outlying parcels, mainly along the beach block of Kentucky Avenue.
Other development proposals never materialized. Pinnacle briefly played with the idea of developing a small, boutique-style casino hotel before backing away from that project in 2011.
Pinnacle’s casino aspirations are now elsewhere. The company announced in December that it is acquiring Ameristar Casinos Inc. for about $869 million. Pinnacle’s casinos are concentrated in the South and the Midwest, while Ameristar has casinos mainly in the Midwest.
Contact Donald Wittkowski: