Thursday, May 29, 2008
Trump to Sell Atlantic City Casino
Trump Entertainment Resorts Inc. agreed to sell the Trump Marina Hotel Casino in Atlantic City to an affiliate of privately held Coastal Development LLC for $316 million.
Trump Chief Executive Mark Juliano said the debt-laden company is "closely evaluating" options, including additional development in Atlantic City, reducing debt and "potential projects to diversify our interests outside of Atlantic City."
Getty Images As part of the transaction, the parties also agreed to end unrelated litigation. In late 2004, Trump sued a group that included Coastal Development over the development of the Seminole Hard Rock Hotel & Casino in Florida.
Chairman Donald Trump said Coastal Development, headed by former confidante Richard Fields, is "buying a wonderful building in a great location. It has been an important part of our company with a loyal customer base and a dedicated team."
New York-based Coastal Development specializes in financing and developing resort destinations, luxury hotels and gaming facilities. It will rebrand Trump Marina as Margaritaville, the brand run by singer Jimmy Buffett which includes shops and cafes.
The sale of the 27-story hotel with 728 rooms comes three weeks after Standard & Poor's cut its credit rating on Trump Entertainment by one notch to B-. Credit analyst Ben Bubeck cited "our expectation for continued challenges to TER's business position, resulting largely from ongoing competitive pressures from operators in Pennsylvania and New York."
He added that expansions of Harrah's and the Borgata resorts in Atlantic City "are expected to put additional pressure on TER's operations." Overall economic weakness is also playing a role in the decline of gaming revenues in the Atlantic City market, as it is in most other U.S. gaming markets.
Write to Mike Barris at mike.barris@dowjones.com
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