{"id":1011,"date":"2008-12-15T16:30:00","date_gmt":"2008-12-16T00:30:00","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/blogs\/dmckee\/index.cfm\/2008\/12\/15\/Phil-Ruffins-big-deal"},"modified":"2008-12-15T16:30:00","modified_gmt":"2008-12-16T00:30:00","slug":"phil-ruffins-big-deal","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/phil-ruffins-big-deal\/","title":{"rendered":"Phil Ruffin's big deal"},"content":{"rendered":"

As you've already read umpteen times over by now, MGM Mirage<\/strong> sold Treasure Island<\/strong><\/a> over the weekend to Phil Ruffin<\/strong>. The latter's sitting on a massive chunk of change ever since playing El Ad Group<\/strong> to the tune of $1.24 billion — or $36 million\/acre) for what used to be the New Frontier<\/strong>.<\/p>\n

(Slightly less than three acres of undeveloped land, previously destined for Tower II of Trump International <\/strong>— which now appears to be on permanent hold — remain in the hands of one Phillip G. Ruffin of Wichita, Kansas. The land directly titled to El Ad — 18.4 acres would work out to a staggering $67.3 million\/acre, so the exact breakdown of Ruffin's bonanza can be difficult to ascertain.)<\/p>\n

At $775 million<\/strong> (7-8X projected cash for flow 2008-09), it's an entirely reasonable price — and at 6X EBITDA for 2007, it borders on a steal. "I would not be able to get a property like [Treasure Island] in normal times," the billionaire candidly told Forbes<\/em>. Moreover, it leaves Ruffin still theoretically sitting atop a veritable throne of cash, with casinos aplenty to be had — not always worth<\/em> having, but other top-tier properties may soon be on offer.<\/p>\n

Already the 'Net is abuzz<\/strong> with speculation as to what MGM might part with next, in order to close the financing gap on CityCenter<\/strong>: MGM Grand<\/strong> (aka "the Green Monster"), New York-New York<\/strong>, Monte Carlo<\/strong>, Circus Circus<\/strong>, maybe even The Mirage<\/strong> itself … not to mention various and sundry pieces of raw land, although the greater appeal of an up-and-running, brand-name casino is obvious. As for Ruffin, with greyhound racinos in his native Kansas having a snowball's chance in Hell of happening, it's no wonder that he decided to re-enter the fray on the Strip, especially at such a favorable price.<\/p>\n

Not only that, he'll help make the deal pencil out by keeping Treasure Island affiliated with MGM Mirage's loyalty-card program. As MGM explains, "We're working out a Technical Services Agreement to provide for that and a variety of services including hotel and accounting systems, parking, tram, et<\/em>c." And if Ruffin's going to affiliate with MGM on one property, why not two?<\/p>\n

Between the fact that A)<\/strong> nobody expects Ruffin to tear down Treasure Island, unlike the New Frontier, and B)<\/strong> it and The Mirage are listed jointly as one property for tax-assessment purposes, it's difficult to use this transaction as a benchmark of land value on the Strip. Thomas Weisel Partners<\/strong> analyst Jake Fuller<\/strong> approximates a $15 million\/acre valuation<\/a> for the deal. (Since that'd work out to an improbable 52.6 acres, Fuller is obviously building a valuation of the existing casino-hotel into his math.)<\/p>\n

MGM's Alan Feldman<\/strong> responds that the purchase price was arrived upon strictly on an EBITDA-multiple-basis, "not per acre. That's because [Ruffin is] buying the operation rather than making a real estate development deal. We'll know the acreage once we go to subdivide as part of the close<\/em>." Even if Ruffin winds up with considerably less than half of the 84 shared Mirage-Treasure Island acres (plus 14 acres' worth of parking lot out back), we're looking a substantial downward correction in the value of being on Strip, compared to the giddy heights reached in '06, especially in the El Ad and Columbia Sussex<\/strong> deals.<\/p>\n","protected":false},"excerpt":{"rendered":"

As you've already read umpteen times over by now, MGM Mirage sold Treasure Island over the weekend to Phil Ruffin. The latter's sitting on a massive chunk of change ever since playing El Ad Group to the tune of $1.24 … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[15,42,11,119,9],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/1011"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=1011"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/1011\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=1011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=1011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=1011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}