ATLANTIC CITY — Call it Trump Entertainment’s version of a garage sale.
Virtually everything in the Trump casino empire is up for the taking — except the flagship Trump Taj Mahal Casino Resort.
Bob Griffin, chief executive officer of parent company Trump Entertainment Resorts Inc., says the latest asset to go on the market is Trump Plaza Hotel and Casino. Griffin noted that Trump has been in discussions with potential buyers, but he did not identify them or reveal the Plaza’s sale price.
“We looked at the Plaza and decided the best thing to do is to sell it. It belongs in stronger hands, with a better balance sheet — somebody who can revitalize that property and make it the centerpiece of the Boardwalk that it should be and used to be,” he said.
Griffin made his remarks during a presentation Thursday at the East Coast Gaming Congress, an annual Atlantic City conference attended by top casino executives. His presentation also outlined the company’s cost-cutting strategy, including plans this year for a debt refinancing.
Trump Entertainment had considered recruiting a partner to invest in the aging Plaza’s overhaul, but ultimately decided it didn’t want to spend the money, Griffin explained.
The Plaza’s sale would remove another Donald Trump-branded casino from the Atlantic City skyline. Trump Marina Hotel Casino (the former Trump’s Castle) was sold last year for $38 million to Texas billionaire Tilman Fertitta and has since been rethemed as the Golden Nugget Atlantic City. Other Trump properties that the company has sold off more recently include the Steel Pier, a corporate office building and a warehouse.
Once synonymous with Atlantic City’s casino industry, Donald Trump is fading into the background. Trump is now only a minority owner of Trump Entertainment after the company’s bankruptcy restructuring in 2010 that left corporate bondholders headed by New York hedge fund manager Marc Lasry in charge.
“We’re a different company — Trump, today — than it was with Donald Trump,” Griffin said of the changes. “Donald did a great job. He was a visionary. He was a great guy to work for. He’s still very friendly and always willing to help our company.”
Steve Norton, a private casino consultant and former senior executive at Resorts Casino Hotel, maintained that the “de-Trumping” of Atlantic City is really no big deal. He said the Trump casino name has been diminished by its three bouts with bankruptcy since the 1990s.
“I don’t think it makes any difference to Atlantic City,” Norton said. “I feel it is more of a negative in Atlantic City than a positive. I just don’t think it brings anything to the table. They’ve been bankrupt three times.”
Norton said he was part of an investment group that tried to buy Trump Plaza but couldn’t raise the financing. Although Norton played down the importance of the Trump name, a bankruptcy judge thought differently in 2010. At that time, the Lasry-led bondholders backed by Donald Trump fought it out with billionaire takeover specialist Carl Icahn for control of the casinos. U.S. Bankruptcy Judge Judith H. Wizmur ruled the Trump brand was worth millions to the casinos and helped “tilt the balance” in favor of the bondholders over Icahn.
Icahn, though, remains in the picture. Griffin noted that Icahn, an investor, holds the debt on the Trump casinos, essentially serving as Trump Entertainment’s banker.
“We have a good relationship with our banker, Carl Icahn,” Griffin told the casino conference.
Trump Entertainment’s strategy moving ahead is to strengthen its balance sheet, including refinancing its debt this year at a lower rate. Griffin characterized the debt’s current 12 percent interest rate as “a little too rich.”
Trump Plaza’s sale would give the company some much-needed cash. Trump Entertainment would prefer to sell the struggling property instead of sinking millions into it to make it more competitive with its rivals. The Plaza incurred a $1.5 million operating loss in the first quarter this year and has seen its gambling revenue plunge 24 percent so far in 2012, New Jersey Division of Gaming Enforcement figures show.
The Plaza’s strength is its location in the middle of the Boardwalk, at the foot of the Atlantic City Expressway entrance. Next door is Boardwalk Hall, the city’s main sports and concert venue. Norton said he believed the Plaza could capitalize even more on its location by catering to events at Boardwalk Hall.
“I still think that’s a great property,” Norton said of the Plaza. “But I think you would need a lot of money fixing it up, especially the public space.”
It seems the only Trump Entertainment asset that is safe from a sale is the Taj Mahal. Griffin emphasized that the Taj continues to be the company’s focus. He also said the Taj would benefit from $35 million worth of improvement projects this year, including new slot machines, a new steakhouse, retail outlets, a Disneylike child-care center, security upgrades and the remodeling of the casino’s Boardwalk facade.
“It’s weather-beaten. It’s worn. It’s tired,” Griffin said of the current facade.
One major project, announced previously, is the opening of a $20 million club called Scores, which will feature dancers stripping down to G-strings and pasties. Griffin said he initially had reservations about the Taj Mahal serving as host to a strip club, wondering whether it was the right fit for the Atlantic City market. But the extra business it will generate for the Taj alleviated his doubts, he added.
“There’s just droves and droves of young people heading out to these clubs. It’s the right thing for us to have,” he said.
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