Prime, casino-zoned land that languished on the market for three years has finally been sold by a Las Vegas company that once planned to develop a $1.5 billion megaresort overlooking the Boardwalk.
The site is where the old Sands Casino Hotel once stood and most recently has served as a temporary art park while long-term development plans are being considered for the oceanfront property.
Pinnacle Entertainment Inc. has sold the nearly 20-acre tract to an investment group called Boardwalk Piers, which includes Brian Popper and his daughter, Erin. North Jersey developer Mitchell Mekles is also one of the buyers, the Casino Reinvestment Development Authority said.
Earlier this year, Pinnacle disclosed that it had reached a preliminary deal to sell the land for $30.6 million — a fraction of the $270 million that the company paid to acquire the Sands in 2006. Erin Popper said the final purchase price was close to $30.6 million, but declined to give the exact amount.
As the new owner, Boardwalk Piers is open to an array of development possibilities for the land, Popper said. Among the options under consideration are transforming the site into family-friendly recreation attractions or developing a new casino.
“It could be an open palette,” Popper said in an interview Friday with The Press of Atlantic City. “We’re really excited. We feel it could accommodate many businesses, depending on how the cards fall.”
Popper noted that New Jersey’s legalization of Internet gambling for the Atlantic City casinos could make casino development an attractive idea. Internet gambling is expected to pump hundreds of millions of dollars of new revenue into the casino companies and their Web partners. It is scheduled to begin Nov. 26.
Under New Jersey’s Internet gambling law, casinos must have a physical presence in Atlantic City to offer Web bets. Casino-zoned sites such as the one now owned by Boardwalk Piers could jump in value, with Internet gambling serving as the catalyst.
“It’s not out of the question it could be some sort of casino,” Erin Popper said. “But it really depends on Internet gambling.”
Brian Popper and Mitchell Mekles met with executives of the Casino Reinvestment Development Authority on Thursday to let them know the sale has been completed. They told the CRDA they don’t have any definite plans yet, but noted they are considering developing the land for family attractions, authority spokeswoman Kim Butler said.
The CRDA is the state agency that controls the Atlantic City Tourism District, a vast area that includes the site bought by Mekles and the Poppers. The authority controls planning and zoning within the Tourism District, so it would have regulatory oversight for development of the Boardwalk Piers land as plans unfold. Butler, however, made it clear that the CRDA will look to Mekles and the Poppers to take the lead for developing the site.
“It’s in their hands,” she said.
City officials held preliminary discussions with Mekles late last year, when he was still in negotiations to buy the land from Pinnacle. At that time, he was considering the possibility of transforming the site into a gigantic amusement park.
“We feel that Atlantic City is in need of family-style entertainment,” Erin Popper said. “We’re open to many ideas and will discuss it. We’d love to do something like that. It’s not set in stone, but it is an option.”
Mekles heads Mitchell Enterprises, a development company based in Fort Lee, Bergen County. The Pinnacle land deal is not Mekles’ first foray in the Atlantic City real estate market. He was the financial backer behind Redding’s Restaurant, a soul-food place on Kentucky Avenue that folded in February 2012 after 17 months in business.
Pinnacle spokeswoman Kerry Andersen declined to comment on the sale other than to say the company will have an update about its Atlantic City operations in its next public filing with the federal Securities and Exchange Commission in October.
The Las Vegas-based Pinnacle originally hoped to develop the site for a $1.5 billion to $2 billion megaresort, but its plans collapsed amid the recession and global credit crisis. The company formally abandoned plans for the casino project in 2010, the same year it put the land up for sale.
Most of the site consists of where the old Sands Casino Hotel had stood. It is a supersized block bordered by Indiana Avenue, Pacific Avenue, Dr. Martin Luther King Jr. Boulevard and the Boardwalk. Erin Popper said it includes 600 feet of Boardwalk frontage. There are other smaller, outlying parcels mainly along the beach block of Kentucky Avenue.
Pinnacle bought the Sands for $270 million in 2006 at the height of the Atlantic City real estate boom. Since then, the city’s casino industry has fallen into a seven-year revenue decline caused by the sluggish economy and competition from gambling markets in surrounding states.
After taking control of the Sands, Pinnacle imploded the old casino in 2007 to make room for its ill-fated megacasino project. The site remained empty until it was transformed last year into a temporary public art display that features sculptures, inspirational messages and a faux pirate ship amid a parklike setting. The art work will be removed when the land is ready for redevelopment.
As the Atlantic City real estate market continued to decline, Pinnacle filed a tax appeal challenging the value of the land. The company settled the case with Atlantic City in December 2011 and was awarded a refund of $8.2 million. Previously, the land was assessed at $224 million, but the figure was reduced to $65 million.
Contact Donald Wittkowski: