AC Trop languishing on the auction block

Mar 25, 2008 6:00 PM

Gaming Insider by Phil Hevener | The state-appointed conservator at the Atlantic City Tropicana has an interesting way with words, fulfilling his responsibilities for keeping everyone up to speed (well, sort of) while saying as little as possible.

There have been "multiple expressions of interest," Gary Stein told members of the Casino Control Commission, who want to see the Trop sold immediately, if not sooner.

With a knack for phrases like this, I was guessing that Stein must be a lawyer.

But, whoa, after a little Googling I was reminded that heís not only a lawyer but a former state supreme court justice.

And so I wondered, what exactly does "multiple expressions of interest" mean? Is there is a long line of deep-pocketed shoppers standing in line outside Steinís office clutching checkbooks or bags of cash?

Probably not, since lots of cash is a hard thing to come by, even for people who might have a genuine interest in acquiring the resort.

Or maybe there are some shoppers showing interest because they are anxious to make a point or two, points that might not have anything to do with a genuine interest in owning the Tropicana.

Now thereís a possibility worth a closer look.

Colony Capital seemed relatively candid weeks go about its willingness to pay something like $850 million for the Tropicana. On the surface, this looked like an interesting possibility since Colony is already licensed in New Jersey by virtue of its ownership of casinos such as the Atlantic City Hilton and Resorts International.

But isnít Colony trying to sell these properties? Thatís what sources in a position to know are saying. Colony officials were not talking, but one theory is that by making a public offer for the Tropicana, as it did, Colony hopes to set the kind of "high bar" that will have shoppers taking serious looks at its own resorts.

Regardless, you have to wonder how many of the "multiple expressions of interest" will morph into genuine offers before Nevada officials decide what action they take against the Tropicana operation in Las Vegas.

Columbia Sussex owns both Trops and Sussex President Bill Yung III may decide that if he is forced to sell one, he may as well sell both since there appears to be far more value in the Tropís 34 acres on the Las Vegas Strip.

The Tropicana name has a lot of appeal gained over the fifty-some years that it has operated in Las Vegas. Selling one but not the other is like saying, "Iíve got a nice pair of shoes but Iím only willing to sell the left one."

Lenders, on the cheap

A senior banking executive was meeting with an equally senior resort company last week when the banker took a call from a top official within the Federal Reserve System.

Would the banker do whatever he could to start loaning money again, trying to make the whole thing sound like an appeal for a show of patriotism.

Basically, weíve got to get things cranked up and moving again in the right direction, is what the guy from the Fed told the banker.

The banker was of course very aware of all of this but had other factors to consider. He waited a couple of beats before asking why should he be making new loans when he can buy every loan on the street for 70 cents on the dollar?

It is this kind of thinking that, for the moment, has the sponsors of some major resort projects gasping for breath, metaphorically speaking. From Las Vegas to Atlantic City, the list of major gaming projects that have been moved to back burners or killed altogether increases weekly.