After giving gambling a shot for more than 30 years, Atlantic City’s historic Claridge hotel is officially out of the casino business.
Bally’s Atlantic City on Tuesday announced that the Claridge Hotel Tower — one of three historic resort properties repurposed into modern casinos — will be sold to a Florida-based hotel operator. TJM Properties Inc. will purchase the 500-room tower for an undisclosed price, returning the Claridge to its original role as a stand-alone hotel.
The new operator has no plans to operate the property as a casino, but has plans for room renovations and other upgrades to the Depression-era building once known as the “skyscraper by the sea.” The sale is expected to close within 90 days, according to Caesars Entertainment Corp., the parent company of Bally’s.
Asked about the sale during a conference call regarding Caesars’ quarterly earnings, Senior Vice President of Finance and Treasurer Eric Hession said the sale made sense for both companies.
“The Claridge has never been an integral part of our Atlantic City strategy,” Hession said. “The buyer had a vision and wanted to come and redo a number of the rooms and remove the gaming as we’ve done about a year ago. ... It’s good for the city.”
TJM, based in Clearwater, Fla., will keep the hotel open while it upgrades the rooms, installs a new front desk and a restaurant, said Kevin Ortzman, senior vice president of Bally’s, Caesars Atlantic City and Showboat. Ortzman pointed to those improvements as being in line with state’s goals of establishing more nongambling amenities in an effort to diversify the city’s tourism offerings in light of declining gambling revenue.
“Through its investment, TJM will be adding nongaming amenities that will enhance the experience of guests of the Claridge, Bally’s and the entire city,” Ortzman said in a statement.
More than a decade has passed since the Claridge hotel has operated as a solo property. The red-brick building with a distinctive cupola perched atop its 24 stories was a luxury hotel when it opened in 1929. Patterned after New York City’s Empire State Building, the hotel was the tallest building in New Jersey until 1989, measuring 370 feet.
Following the onset of Atlantic City gambling, the hotel was reborn as a casino in 1981, but later struggled as a small casino operating among giants in the gambling industry. In a $65 million bankruptcy sale, the Claridge was folded into Bally’s in 2002. In addition to the Claridge, the sprawling complex also includes, the Bally’s Hotel tower, the Victorian-era Dennis Hotel and Wild Wild West Casino.
The Claridge once offered three floors of gambling but downsized over time, eventually removing gambling entirely by the beginning of this year as the company said it was exploring plans for redevelopment and other non-gambling offerings.
Caesars has also invested in the property. The Claridge saw a $20 million facelift in 2010 as the rooms were upgraded with new furniture, carpeting and bathroom fixtures. The distinctive red brick facade was also refurbished.
The details of what lies in store for the property haven’t yet been disclosed. No specifics regarding a theme or marketing approach were disclosed Tuesday.
“We are excited about the great opportunity to own and operate this magnificent historic hotel,” said Matt McCarthy of TJM Properties. “We look forward to bringing more non-gaming amenities to the Atlantic City community.”
A call to TJM for further information was not immediately returned Tuesday night. TJM operates 10 hotels in the Tampa Bay region, including three under the Quality Inn, Baymont Inn and Howard Johnson flags. The company has also owned and operated more than 19 senior living communities.
A Philadelphia developer has said plans existed to redevelop the property as a hip luxury resort in part of the Morgans Hotel Group, but those plans were later abandoned. Developer Christopher DiGeorge has filed a lawsuit in state Superior Court against Caesars seeking more than $40 million in damages.
In third-quarter earnings released Tuesday, Caesars reported a $761.4 million loss. The company’s four Atlantic City properties and Harrah’s Philadelphia race track casino saw a combined revenue decline of almost 12 percent to $421.5 million. The properties are grouped together in filings as the Atlantic Coast region.
Most of the discussion in the conference call Tuesday regarding the earnings did not focus on the revenue loss. Instead analysts continued to question a recent report by the Massachusetts Gaming Commission suggesting that Caesars might not pass its background check for an East Boston casino.
Caesars Chairman and CEO Gary Loveman said he remains disappointed and angry about the Massachusetts report.
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