Developer gets nod in Kansas, takes lead in bidding for AC Tropicana
It’s not one of the major casino companies-yet-but Baltimore developer Cordish Company last month flexed its muscle in two states. Cordish won a bid in Kansas against big-league opposition and nosed into the lead in Atlantic City as the “stalking horse” candidate to buy the distressed Tropicana.
In Kansas, Wyandotte County will get a Hard Rock Hotel and Casino and additional speedway races, possibly as soon as June 2009, the result of a close vote last month by the Kansas Lottery Gaming Facility Review Board to award the 15-year regional casino concession to Kansas Entertainment.
Kansas law authorizes four regional state-owned, privately operated casinos in four different counties.
The winning group is a partnership of Kansas Speedway and the Cordish Company. They propose to build a $705 million, 300-room Hard Rock Hotel and Casino with 3,000 slot machines, a convention center and shopping outlets-all overlooking the Kansas Speedway racetrack.
The decision of the board was on a 4-3 vote, with Golden Gaming Inc., of Las Vegas coming in second. Legends Sun, a proposal involving the Mohegan Tribe of Connecticut, garnered no votes. Las Vegas-based Pinnacle Entertainment Inc. withdrew from the process a few days before the vote.
To help sweeten the deal, last month Kansas Speedway promised to seek a second NASCAR Sprint Cup race, and to build a second course. It also promised to hold a lucrative recreational vehicle rally annually.
Top for Trop
In Atlantic City, Cordish was named the lead bidder for the Tropicana Casino & Resort-up for sale since last December-after months of speculation.
State-appointed conservator Gary S. Stein last month entered into negotiations with Baltimore-based Cordish Company, which has offered cash and securities totaling $700 million for the Boardwalk resort. Former owner Tropicana Entertainment LLC, a subsidiary of Columbia Sussex Corp., lost its license after less than a year of operation when the New Jersey Casino Control Commission deemed it unfit to run a first-class operation.
But the ousted owner won’t go down without a fight. Tropicana Entertainment-under new leadership and with a new board-has said it will sue to stop the transaction, which it called a “fire sale.”
New CEO Scott C. Butera says the deal would amount to a “windfall (for Cordish) at the expense of other innocent parties.”
Tropicana was granted an appeal of the commission decision to the state Supreme Court last month, despite the fact a lower court upheld the nod.
Butera, who helped Donald Trump emerge from Chapter 11 bankruptcy in 2005, was brought in to replace embattled Columbia Sussex head William Yung. In 2007, Yung was slammed by New Jersey commissioners for refusing to follow regulatory requirements and cutting almost 900 jobs at the Trop, leaving the property in disarray. Butera says the restructured company, sans Yung, is better equipped than any other organization to run the Atlantic City resort, which includes New Jersey’s largest hotel.
The Cordish Company is one of the world’s largest real estate developers, with expertise in gaming, lodging, entertainment and retail. In Atlantic City, it has already invested $49 million to build retail center Atlantic City Outlets-The Walk, in partnership with the state-run Casino Reinvestment Development Authority, and in 2007, the company sought to acquire Trump Entertainment Resorts Inc., which owns three casinos in Atlantic City. Cordish was also responsible for developing the two Seminole Hard Rock Casinos in Florida. And, the company has just recently developed Indiana Live!, a racino connected to Indiana Downs.
Also involved in the Cordish bid for the Trop is Dennis Gomes, former president of the Tropicana under Aztar, who directed the development of the casino’s highly successful Quarter shopping and entertainment center.