Atlantic City land sale reflects hard times

The nine-story parking garage of the former Sands Casino Hotel was imploded this morning to make way for a Pinnacle Atlantic City project.
The nine-story parking garage of the former Sands Casino Hotel was imploded this morning to make way for a Pinnacle Atlantic City project. (DAVID M WARREN / Inquirer Photographer)
Posted: March 08, 2013

Land is dirt cheap in Atlantic City, just like some of its aging casinos.

Gaming insiders say Pinnacle Entertainment Inc.'s deal to sell land it has owned at the seaside resort since 2006 for $30.6 million underscores a painful fact: Things have drastically changed - and not for the better.

Las Vegas-based Pinnacle Entertainment paid $270 million for the 19 acres at the heart of the Boardwalk district - site of the former Sands Casino Hotel. Pinnacle imploded the Sands in 2007 to make way for a $1.5 billion megacasino, but scrapped those plans as the economy and Atlantic City gaming revenues tanked.

It put the land up for sale in 2010.

In a filing Thursday with the Securities and Exchange Commission, the company acknowledged it had a buyer but did not disclose the name.

The $30.6 million sale price is in line with what smaller and older Atlantic City casinos have fetched in the last two years.

The former Trump Marina, rebranded the Golden Nugget Atlantic City Hotel and Casino, sold for $38 million in early 2011 to Landry's Inc. Resorts was sold to Morris Bailey and the late Dennis Gomes for $31.5 million in December of that year. Trump Plaza last month announced it was sold to Meruelo Gaming Holdings L.L.C. for $20 million. The sale is expected to close by May 31.

"It's a challenging market to profitably operate a casino," gaming analyst John Kempf of RBC Capital Markets L.L.C. said, "especially if you have a location disadvantage or lack scale and amenities.

"There is just too much supply to efficiently serve the market."

Kerry Andersen, spokesperson for Pinnacle, said the company had nothing more to add on the sale, which is expected to close by the end of the month.

The company said it all in its filing: "We have reflected our Atlantic City operations as discontinued operations and the related assets and liabilities as held for sale."


Contact Suzette Parmley at 215-854-2855 or sparmley@phillynews.com.

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