Colony Capital Places First Bid on the Tropicana in Atlantic City
UPDATE: Well, I learned my lesson about writing posts at 2AM. I recieved a slew of emails today telling me that a lot of my facts in this post were incorrect.. Which is very unlike me – normally I research each post as much as I can. In anycase, this post has been changed to reflect any errors I made. I apologize to anyone who was mislead, and thank those who pointed out my errors. Please read the comments below for some more information.
Yesterday the top news story coming from Atlantic City OR Las Vegas was Colony Capital & Resorts International’s bid on the Tropicana Hotel & Casino in Atlantic City. As everyone knows the owners of the Tropicana, Columbia Sussex, lost their gaming license back in December and according to Gaming Board Rules, must sell the casino in 120 days. (Here’s my previous article on the Tropicana).
This bid is the first firm bid put in writing that has been made for the casino. There have been numerous companies who have said they are interested in the property (Cordish Companies – Owner’s of Atlantic City’s “The Walk”, and failed potential buyer of Trumps three AC properties, Pinnacle Gaming, and the Mohegan Sun Tribe who runs the Mohegan Sun Casino in CT.)
This is a unique sale for a number of reasons:
- This is only the second time a gaming license has not been renewed in Atlantic City, forcing a casino sale.
- Columbia Sussex can only sell the casino for the price they originally paid for it, or its current market value – which ever is lowest. Assuring Columbia Sussex of receiving little or no profit from the sale.
- There is a very strict time limit on how fast the casino must be sold – 120 Days from the day of license renewal being denied, although I am unaware as to what would happen if a viable bid is not received and accepted within 120 days.
Colony Capital and its subsidiary Resorts International, which owns and operates the Atlantic City Hilton and Resorts Casino in Atlantic City sent a written offer for the Tropicana to both the Casino Control Commission and the Trustee who is currently overseeing the casino. The bid was reportedly $850 million, including a $50 million good faith deposit and a request for no more bids to be accepted for 30 days in order for Colony Capital to do its due diligence. In addition, Colony said they will give the property a $100 million dollar renovation as well (impressive since the Tropicana just finished a major renovation, built a new hotel tower and retail addition in 2006). Since Columbia Sussex purchased the Tropicana in a package deal with a few other casinos throughout America, it is unclear how much they paid for the Tropicana itself, so its unclear if the $850 million is its current market value or what Columbia Sussex purchased it for.
There are a few interesting tidbits which came to light with this turn of events that I wasn’t previously aware of..
- I didn’t even know that Resorts was still in business in Atlantic City (and I frequent Atlantic City often – I guess its just a small casino!)
- The Trustee’s sole job is to oversee the sale of the casino – obviously he is not running its day to day operations – that’s being done by the current management team, which was in place before Columbia Sussex purchased it, but I wasn’t aware that the only thing the Trustee is responsible for is its sale.
Before I come to any conclusions as to if Colony is the best bidder on the development, I’d like to see some other offers from other players in Atlantic City. Colony does have a good track record – plus they already have their Casino License, which can make the transaction smoother, but the Tropicana is definitely a higher profile property than both the Atlantic City Hilton & the Resorts property – not that they would have difficulty running it, but it would instantly put them into another league in Atlantic City. Resort’s International is not the only gaming experience which Colony has, they are also the owners of the Las Vegas Hilton (which – ironically, suffers almost the same problems as the Atlantic City Hilton – far away from most action, old and not too exciting), as well as Kerzner International – the company which build The Atlantis Resort in the Bahamas, as well as numerous other first-class resorts throughout the world.
Colony Capital is not very well known – although many of its properties are very well known – for example, as I briefly stated above, Colony Capital owns Kerzner International, Resorts International, plus numerous smaller Gaming Hotels and Resorts throughout America and the World, Colony also owns Fairmont/Raffles hotels, and numerous single hotel locations throughout the world, hundreds of residential developments and numerous office buildings throughout the world. Colony Capital is a huge company, but since its a private investment firm, it usually stays under the radar and lets its owned companies take the limelight. It’s interesting to note that Colony Capital was one of the initial bidders for Aztar Corporation, the company which sold the Tropicana in Las Vegas & Atlantic City to Columbia Sussex.
I hope to see more bids on the Tropicana, because even though Colony is a good purchaser – they have the money, experience, and ability – I’d still like to see something with a little more spice.. Say, Planet Hollywood expanding to Atlantic City, or Pinnacle purchasing the property and having their second Atlantic City casino – before the first one even opened, and lastly, I’m interested in what the Cordish Companies have up their sleeve – they are not known as a gaming operator, so I think they would like to shake up AC to show they are serious.
Related posts:
- How Tropicana’s License Woes Will Help Atlantic City
- MGM Grand Atlantic City: Coming Soon
- Morgan Stanley Building a Ultra-Luxury Casino in Atlantic City
- Planet Hollywood Casinos Expanding to Atlantic City
- Atlantic City Gets It’s First Boutique Hotel – The Chelsea!
Category: atlantic city, casino, colony capital, Hotels, las vegas
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Read my 
I know the ‘net has free speech, but when I click on a site I at least expect correct information. How could you write an article on Atlantic City with so little personal knowledge and full of misinformation? Unless I am sadly mistaken: #1, Resorts has never been closed and is the oldest continuing operation in A.C.; #2, the man’s name is Curtis BASHAW, not BRADSHAW; #3, he is partnering with Wallace Barr to possibly build a casino south of the Hilton; #4, he is not connected with Colony Capital; #5, if they don’t get the Trop sold within the 120 day period, the “commission” has already stated that there is no problem in extending the time frame; #6, Colony Capital does NOT own the Trop in Las Vegas–Columbia Sussex still owns it although they may have to sell it now that all their problems are out in the open. And so on!!
I think I’ll stop here. What a sad state of affairs when someone can publish incorrect statements that unsuspecting linkers will not know any better and take as the gospel! If you enjoy blogging, why not take a few minutes to get your facts straight before you start typing?
I know the ‘net has free speech, but when I click on a site I at least expect correct information. How could you write an article on Atlantic City with so little personal knowledge and full of misinformation? Unless I am sadly mistaken: #1, Resorts has never been closed and is the oldest continuing operation in A.C.; #2, the man’s name is Curtis BASHAW, not BRADSHAW; #3, he is partnering with Wallace Barr to possibly build a casino south of the Hilton; #4, he is not connected with Colony Capital; #5, if they don’t get the Trop sold within the 120 day period, the “commission” has already stated that there is no problem in extending the time frame; #6, Colony Capital does NOT own the Trop in Las Vegas–Columbia Sussex still owns it although they may have to sell it now that all their problems are out in the open. And so on!!
I think I’ll stop here. What a sad state of affairs when someone can publish incorrect statements that unsuspecting linkers will not know any better and take as the gospel! If you enjoy blogging, why not take a few minutes to get your facts straight before you start typing?
William – Thank you for your comments. You are correct that the net has free speech – but at the same time, I never intend to mis-lead anyone, and normally my posts are all fact checked. I apologize for the errors. In response to your questions:
1. I never stated as a fact that Resorts was ever closed. I did state that I personally didn’t realize that Resorts was still open though.
2. That was a simple error.
3. You are correct, I even stated that in a previous post – I just had my facts mixed up.
4. You are correct – that was my error again.
5. Thank you for bringing that to my attention.
6. You are correct – I recieved the information that they purchased Aztar directly from Colony Capital’s website.. In fact if you go to View our Investments by Location, the Tropicana LV is clearly pictured, and the wording makes it sound as though they submitted a bid – and then won it.. That was not the case.
Thanks for pointing out my errors, and I hope that I have rectified anything which was incorrect.
Thanks for your updates. But, young man, you still need to read thoroughly anything that you are essentially quoting from. To wit, your advice for me to go to the Colony website to see where you got your Aztar ownership info. I did so, and I quote: “Gaming acquisition of 1.3 million shares of Aztar Corp prior to submitting a bid to acquire the publicly traded gaming company.” You may need a remedial lesson in stock market lingo! All they said was that they bought some shares of Aztar before making a bid.
Thanks for your updates. But, young man, you still need to read thoroughly anything that you are essentially quoting from. To wit, your advice for me to go to the Colony website to see where you got your Aztar ownership info. I did so, and I quote: “Gaming acquisition of 1.3 million shares of Aztar Corp prior to submitting a bid to acquire the publicly traded gaming company.” You may need a remedial lesson in stock market lingo! All they said was that they bought some shares of Aztar before making a bid.