Coastal Marina LLC, an affiliate of Coastal Development LLC, said Thursday it is buying the casino from Trump Entertainment Resorts Inc., the casino company founded by real estate magnate Donald Trump.
After the $316 million sale closes in six to nine months, Trump Entertainment will have two remaining casinos in Atlantic City: The Trump Taj Mahal Casino Resort, and Trump Plaza Hotel and Casino.
"It's a great deal for both of us," Trump told The Associated Press in an interview Thursday morning. "They're buying a wonderful building in a great location."
Richard T. Fields, chairman of Coastal Marina, will be getting his second casino property with the sale. He is the co-developer of the Seminole Hard Rock Hotel and Casino in Florida, and also owns a ranching company, Jackson Land and Cattle in Jackson Hole, Wyoming.
"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.
He was not immediately available to further discuss his plans for Atlantic City.
Coastal Development, an affiliate of Coastal Marina, is the largest shareholder in the Suffolk Downs racetrack in Boston, according to company spokesman Charlie Leonard.
He said Coastal Marina will own all of the Atlantic City project, but will engage in a business venture there with Margaritaville Holdings LLC, the business arm of musician Jimmy Buffett that includes a string of restaurants and retail shops. The shops feature a Florida Keys theme, and take their name from Buffett's most famous song.
"They (Margaritaville Holdings) will be involved throughout the design and development of the project," Leonard said.
Margaritaville Holdings is also involved in a casino project being built in Biloxi, Miss. by Harrah's Entertainment Inc., to be called the Margaritaville Casino Resort.
Trump Marina was the lowest performing of Trump's three Atlantic City properties. Located in the city's marina district, it was dwarfed by market leaders - and marina neighbors - the Borgata Hotel Casino & Spa, and Harrah's Atlantic City.
In the first quarter of this year, Trump Marina reported a 48.2 percent drop in gross operating profits to $4.8 million.
The sale marks the conclusion of an on-again, off-again courtship that Trump Entertainment Resorts has been conducting with potential suitors for the past year. At least two prior deals to sell all or part of the company fell through.
The company reported a wider quarterly loss in the first quarter of this year, blaming a general economic slowdown, competition from out-of-state slots parlors, and promotional costs associated with its new player loyalty program, TrumpONE, which tracks play and awards comps at all three Trump casinos. Each casinos used to have its own player card.
The company reported a net loss of $18.6 million, or 59 cents per share, compared with a loss of $8.1 million, or 26 cents per share in the same period a year ago.
Morgan Joseph & Company analyst Justin Sebastiano was surprised the sale price was as high as it was.
"Any way you slice it, Coastal Marina has over-paid for the Trump Marina," he wrote in a note to investors Thursday. He said the best course of action would be for Trump Entertainment to use the money to pay down some of its $1.6 billion in debt.
Mark Juliano, Trump Entertainment's chief executive officer, said cash from the sale will help it improve its two remaining properties, as well as look at potential opportunities outside Atlantic City.
"We're developing a plan right now," he said. "But because it will be awhile before we actually have the cash in hand, what looks interesting to us right now might not necessarily be available in six to nine months. We will start to identify the properties outside Atlantic City that would be appropriate and that we can afford."
Alternatively, Juliano said, cash from the sale could be used to build a new hotel tower at either the Taj Mahal or Trump Plaza.
He said Trump Entertainment is not currently entertaining any other sale offers.
"We're staying intact now for the time being," he said.
The company's largest project is a new 782 room hotel tower at the Taj Mahal due to open in September.
The sale also settles litigation between Trump Entertainment and Fields over wooing of the Seminoles to build a casino in Florida.
Fields once represented Trump in talks with the tribe but did not complete a deal. He later joined with the Baltimore-based Cordish Company to build the Hard Rock there, prompting Trump to sue.
Trump Marina covers 14 acres and includes a 27-story hotel with 728 guest rooms, including 153 suites. It has 79,000 square feet of casino floor space and approximately 58,000 square feet of convention, ballroom and meeting space.
It also has an 11-bay bus terminal and a rooftop helipad, as well as a nine story parking garage capable of accommodating approximately 3,000 cars. The property also includes the lease for the Senator Frank S. Farley State Marina.
Trump Entertainment resorts shares rose 53 cents, or 18.3 percent, to $3.42 in morning trading Thursday.
