July 27, 2010 / 11:08 PM / 9 years ago

MGM Resorts to sell Atlantic City land for $73 million

LOS ANGELES (Reuters) - Casino operator MGM Resorts International (MGM.N) plans to sell the land under its joint-venture Borgata resort in Atlantic City, New Jersey, for about $73 million.

The deal follows MGM’s agreement earlier this year to exit New Jersey after state regulators objected to the suitability of Pansy Ho, the company’s partner in a separate venture in China’s Macau.

The buyers of the Borgata land are Vornado Realty Trust (VNO.N) and Geyser Holdings, Las Vegas-based MGM said in a statement on Tuesday.

The parcels total about 11.3 acres, making the deal worth just under $6.5 million per acre.

The transaction, which must be approved by New Jersey regulators, is expected to close by the fourth quarter of this year.

MGM is still in talks with potential buyers of its 50 percent interest in the Borgata resort itself, said company spokesman Gordon Absher.

MGM said that after the transaction it will still own about 85 acres of developable land in Atlantic City, of which some 70 acres are adjacent to the Borgata.

Boyd Gaming Corp (BYD.N) owns the other half of the Borgata, and will not be affected by the land sale, Absher said.

MGM and Boyd opened the Borgata in 2003. It was deemed a runaway success and revealed an unsated demand for high-end hotels in Atlantic City.

But the rest of the city’s casinos struggled as new gambling houses cropped up in neighboring states, luring gamblers from the boardwalk.

Gaming revenue at the city’s 11 casinos tumbled 13.2 percent in 2009, data from the New Jersey Casino Control Commission showed. The Borgata outperformed the rest, posting only a 2.3 percent drop.

The MGM land sale comes a week after New Jersey Gov. Chris Christie unveiled a plan to take over the city’s gambling district in hopes of reviving it.

Additional reporting by Deepa Seetharaman; Editing by Gary Hill

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below