Trump Marina to become a ‘Margaritaville’ casino

Trump Marina to become a ‘Margaritaville’ casino in $316M. sale
By DONALD WITTKOWSKI, Staff Writer, 609-272-7258
Published: Thursday, May 29, 2008




A New York gambling company is buying Atlantic City’s Trump Marina Hotel Casino for $316 million, and will rename it “Margaritaville,” the companies said Thursday.
Edward Lea




2 p.m. Update - ATLANTIC CITY — Trump Marina Hotel Casino is being sold in a $316 million deal that will transform the poorest performing property in Donald Trump’s gaming empire into a “Margaritaville” casino of singer Jimmy Buffett fame.
The buyer is Coastal Marina LLC, an affiliate of Coastal Development LLC, a company headed by former Trump friend turned enemy Richard T. Fields. As part of the Marina sale, Trump has agreed to end a four-year legal battle that accused Fields of cheating him out of developing the Hard Rock casinos with the Seminole Tribe in Florida.

“They’re getting a terrific building in a great location and a wonderful, potential redevelopment site,” Trump said in an interview Thursday morning after the sale was announced.

Fields plans to rebrand the Marina into a Margaritaville concept in partnership with Buffett, the singer-songwriter whose career has enjoyed a resurgence in recent years. Buffet’s 1977 hit song “Margaritaville” reflects the ultimate laid-back lifestyle in a tropical climate.

“Together with Jimmy Buffett’s team at Margaritaville, our plans are to create an exciting new property that we believe will tap its full potential and make it one of the most successful destination gaming resorts in Atlantic City,” Fields said in a statement.



Harrah’s Entertainment Inc., owner of four Atlantic City casinos, is developing the Margaritaville Casino & Resort in Biloxi, Miss., also featuring a Buffett-inspired theme.
Trump Marina has been the subject of sale talks for a number of years, but owner Trump Entertainment Resorts Inc. and its predecessor, Trump Hotels & Casino Resorts Inc., were never able to reach a deal. The bayside casino has been under Trump’s control since it opened in 1985.

“We’ve had many offers for the Marina,” Trump said.

With the underperforming Marina now off his plate, Trump noted that his company will be able to concentrate on the flagship Trump Taj Mahal Casino Resort and sister Boardwalk property Trump Plaza Hotel and Casino.

“It’s good to have one less,” he said. “This way, we can focus on the other two.”

Trump said he has no intention of selling the Taj Mahal or Plaza at this time. However, all of the Trump casinos were on the block last year during an aborted sale of the entire company.

“We have been focused on this deal for a while and we’re not thinking of that,” Trump said of the possibility of selling the Taj Mahal or Plaza after the Marina deal is completed.

The Taj Mahal is undergoing an expansion that includes a new $255 million hotel tower. The nearly 800-room addition will open in stages beginning Labor Day weekend, with the full 40 stories ready by the end of the year. The aging Plaza is still awaiting major redevelopment.

Mark Juliano, chief executive officer of Trump Entertainment, said cash from the Marina’s sale strengthens the company’s finances and provides flexibility for development projects in Atlantic City and perhaps elsewhere.

“We are closely evaluating the variety of options before us to create value for our shareholders, including additional development in Atlantic City, reducing the company’s debt, and potential projects to diversify our interests outside of Atlantic City,” Juliano said.

Justin T. Sebastiano, a gaming analyst for Morgan Joseph & Co. Inc., said the sale equates to nearly $20 million per acre for the Marina property. He speculated that the Fields group paid such a high price to rid itself of the Trump litigation in the Hard Rock deal.

“Any way you slice it, Coastal Marina has overpaid for Trump Marina,” Sebastiano wrote in an investment report.

Sebastiano noted that the deal will help prop up Trump Entertainment’s sagging finances and stock price, but he cautioned company shareholders not to expect a dramatic turnaround.

“This is a move in the right direction, but Trump Entertainment still has a long way to go,” he wrote.

In the first quarter this year, Trump Entertainment reported a loss of $18.6 million, or 59 cents per share, compared to a loss of $8.1 million, or 26 cents per share, in the same period last year. At Trump Marina, slot winnings sank 10.6 percent in April.

Hilton Hotels Corp. built the Marina casino in the 1980s, but was denied a gaming license, so Donald Trump personally bought it. He owned it until fall 1996, when he sold it for $485 million to Trump Hotels & Casino Resorts.

Trump Marina, once known as Trump Castle, has been overshadowed by its Marina District neighbors, Borgata Hotel Casino & Spa and Harrah’s Atlantic City. Lacking major improvements, the property is essentially the same one that opened 23 years ago. Trump had talked of giving the Marina a facelift following the company’s exit from Chapter 11 bankruptcy protection in May 2005.

The Marina’s sale is pending regulatory approval by the New Jersey Casino Control Commission. Sebastiano said regulators are likely to approve the deal because the rebranded casino should generate more business for Atlantic City than the old Trump Marina.

“I’ve enjoyed it for many years and I know they will also,” Trump said of the change in ownership.

See Friday's edition of The Press for additional coverage.