That’s how Atlantic City Tropicana conservator Justice Gary Stein is trying to pass off a deal that continues to make a loud “Oink!” He’s trying to spin the media that his $700 million agreement with Cordish Co. is really an $800 million purchase once you factor in a promised $100 million worth of renovations. (Does he have that in writing, mayhap?)
Having made his bed with Cordish, Stein finds himself having to lie in it. What looks like $700 million on the surface turns out to be $450 million in cash and $250 million in securities. And when people hear the term “securities” right now, they feel anything but secure. The alternative was an all-cash, $575 million offer — this for a casino that was drawing bids in the $850 million-$950 million range a scant five months ago. Stein — does it bear repeating? — shredded those offers even as the market started to soften and now finds himself a seller in a buyer’s market.
Right now my sympathies are with Tropicana Entertainment CEO Scott Butera, who has to maximize the value of the Trop in order to satisfy a host of creditors. Instead, he’s seen Stein fritter that value away. And remember, since Columbia Sussex CEO William J. Yung III weaseled out of paying the fines imposed on him by the State of New Jersey by instructing in lordly fashion that they simply be deducted from the eventual sale price, that means Butera is looking at an increasingly meagre payday. His repeated cries of “fire sale” are sounding less and less like a catchy exaggeration and more like the ugly truth.
If Stein can’t get a good price on the Trop, it’s time for the New Jersey Casino Control Commission — which appointed this Barney Fife to run the sale — to seriously consider putting the property into Butera’s hands and seeing if he can make a go of it. ColSux apparently couldn’t have cared less if it drove the Trop’s revenues straight into the ground (which it did), but with debtors’ knives at his ribs, Butera has a considerably sharper incentive to make the Trop competitive again.
Hell may freeze over before Station Casinos puts the first shovel in the ground on its Inspirada project. Considering how saturated the locals-casino market in Las Vegas is, Station would be crazy to proceed at this time. But that’s not stopping the company from trying to annex a 22% increase in the size of the project’s footprint.
Never let it be said of Station that it was content to take an inch when there was a mile to be had. And, should the economy continue to go south or were Station to strangle on its LBO-related debt, the more real estate it has to flip, the better its chances of survival.
