Columbia Sussex forced to sell N.J. casino
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Filed under: Auction | Editor's Choice | Real Estate
New Jersey pulled Columbia Sussex Corp.'s license to operate the Tropicana Casino and Resort in Atlantic City, thereby forcing a sale of the property. Columbia Sussex took over the management of the Tropicana in January after closing on its $2.8 billion purchase of Aztar. In the months that followed, the firm cut staff and waged a battle against unions. In the process, the casino reportedly developed pest problems, which ultimately sealed its fate, according to The Newark Star Ledger.
Until sold to a new owner, the casino will continue to operate under a state trustee, retired Judge Gary Stein. However, the Ledger notes that a sale may be difficult not only because of the credit crunch, but simply because of the threat that another newcomer could lose a license. To exemplify the problems of selling Atlantic City casinos, the Ledger notes Trump Entertainment Resorts Inc.'s troubles selling itself earlier in the year. Additionally, the state's rule that no company can own more than three casinos will immediately eliminate Harrah's Entertainment Inc. from the auction.
The possible bidders:
- Colony Capital LLC, which operates the Trop's neighbor the Hilton, could take a bet on fixing the Trop rather than investing a reported $1 billion in building a new tower at the Hilton.
- Another possible taker is Pinnacle Entertainment Inc., which lost the Aztar auction to Columbia Sussex. Pinnacle last month began work on its first Atlantic City casino when it imploded the old Sands.
- Borgata partners Boyd Gaming and MGM Grand might take an interest.
- Others who recently have shown interest in New Jersey gaming include former casino executive and regulator Dennis Gomes, real estate developer Morris Bailey and gaming mogul Steve Wynn — all reported took part in the Trump auction.
Columbia Sussex now has the distinction of being one of only two firms to lose a casino license in New Jersey. The last Atlantic City casino to lose a license was the Atlantis Hotel & Casino in 1989. — Matthew Wurtzel
See story from The Newark Star Ledger
See Dealscape: Columbia Sussex faces troubles in New Jersey
See May 2006 acquisition story from TheDeal.com
See Aztar-Columbia Sussex Deal Memo from Merger Arb Alert (subscription required)
See Trump auction profile from AuctionBlock.com (subscription required)
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I've worked for Columbia Sussex and they are a garbage company. I'm not surprise that the cheap @$&$#$'s lost anything.
i work for a hotel w/columbia sussex as well and they are such cheap assed mofo's. They even turned the AC off at the front desk to save money.. pathetic huh???
Yeah,,I work for them too that's the shittiest company ever..They turn off every single lights in the hotel,they would send people home after working 2 hours of your shit,they give no chance to any employees,and they pay really cheap..
This company is a JOKE!! I was a manager at one of there properties in Bloomington, MN. The property is a dump..I truly never understood how they were able to carry the MARRIOTT flag...? If lucky they should have had a Best Western flag. The GM of the property got promoted from a sales position..this person...the GM of the hotel could not even check in a guest or look up a guest accounts reward # nor there room # or anything else for that fact!! When I say WILLIE was truly useless I truly mean it!! MARRIOTT PLEASE INVESTIGATE THAT AIRPORT MARRIOTT IN BLOOMINGTON, MN!! THEY SHOULD NOT BE ABLE TO CARRY THE MARRIOTT FLAG!! ALL YOU NEED TO DO IS TAKE A TOUR AND YOU WILL SEE FOR YOURSELF!!
Why is anyone surprised. There will be more of AC casinos in trouble in the future. They have become very greedy places. Comps have dried up, table games are just about gone and the ones left are high stakes. They dont want average gamblers just high rollers ands slot players where they control the take. It will get worse before it gets better.