Pinnacle Entertainment expects to sell Atlantic City casino site at ’significant discount’

Pinnacle: ‘Significant discount’ on AC land sale

ATLANTIC CITY, N.J. — Not long ago, Pinnacle Entertainment had grand plans for a sparkling new casino resort on the Atlantic City Boardwalk that would cost upward of $2 billion.

On Thursday, the company acknowledged what has long been apparent: It’s going to take a bath when it sells the land where that now-scrapped resort would have been built.

Pinnacle bought most of the nearly 20-acre site for $270 million from entities affiliated with billionaire investor Carl Icahn just four years ago and later added nearby land worth another $70 million.

“Certainly we recognize that there is going to be a significant discount to our purchase (price) upon a sale,” Carlos Ruisanchez, the company’s executive vice president of strategic planning and development, said during a conference call with analysts.

But he said Pinnacle was encouraged by word on Tuesday that MGM Resorts International sold its land under Atlantic City’s Borgata Hotel Casino & Spa to Vornado Realty Trust and Geyser Holdings for $73 million.

A broker representing Las Vegas-based Pinnacle told the Wall Street Journal this week the empty land could sell for 70 percent less than Pinnacle paid. Jones Lang LaSalle confirmed it is marketing the land for Pinnacle but would not name a price.

Ruisanchez acknowledged the circumstances of the two sales are different. MGM decided to pull out of Atlantic City — and its half-ownership of the city’s top casino — when New Jersey regulators forced it to choose between Atlantic City and its partnership in Macau with the daughter of a reputed Asian organized crime boss.

In contrast, Pinnacle’s property is not a going concern. The company pulled the plug due to Atlantic City’s struggles with competition, and the sour economy.

Pinnacle imploded the Sands in 2007 to make way for a beach house-themed resort in a wave of new investment several developers proposed for the nation’s second-largest gambling market — before the bottom fell out of the economy.

Of four Atlantic City projects then on the drawing board that were worth a combined $10 billion, only one proceeded, the Revel casino. It ran out of money halfway through construction; about $1 billion worth of work remains on the interior of the development, which officials consider too far along to abandon.