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Press of Atlantic City - August 7, 2010
Former Tropicana executive Dennis Gomes expresses interest in buying Resorts Atlantic City
By DONALD WITTKOWSKI Staff Writer | Posted: Saturday, August 7, 2010
ATLANTIC CITY — A former top gaming executive who was unsuccessful in attempts to acquire the Trump and Tropicana casinos has emerged as a possible buyer for the financially ailing Resorts Atlantic City.
Confirming his interest in Atlantic City's oldest casino, Dennis Gomes said he toured Resorts this week but stressed that he has no agreement to buy the Boardwalk property.
Related story: Lender wants to force Atlantic City's Hilton casino into receivership
"I'm looking at it," Gomes said in an interview. "I was all over the property, examining the place. But until we have a purchase agreement, I can't say anything."
In December, Resorts was taken over by a group of banks after it defaulted on its $360 million mortgage and faced possible foreclosure. Lenders led by Wells Fargo Bank now own the casino hotel and are trying to unload it.
TriMont Real Estate Advisors, an Atlanta company that has been working with the lenders, has the casino up for sale on its website. No price is listed. Eastdil Secured, a commercial real estate subsidiary of Wells Fargo, is helping with the sale. Officials with TriMont and Eastdil did not return messages seeking comment.
Gomes, who spent more than 30 years as a senior executive in the Las Vegas and Atlantic City gaming markets, has been on the prowl for a casino ever since he left Tropicana Casino and Resort in 2005 following a management shake-up. He fell short in attempts to buy the Trump Entertainment Resorts Inc. casinos in 2007 and was part of a group that made a bid for Tropicana in 2008 before billionaire investor Carl Icahn eventually acquired the gaming hall in a bankruptcy auction.
"I love Atlantic City, and everybody knows I've been interested in coming back to the city," said Gomes, who is now a gaming consultant. "I want to show what my love, passion and marketing promotions can do. All I can say is that I want to be back because I love it."
Gomes said he remains optimistic about the city's future, despite a four-year revenue slump caused by the economic meltdown and intense competition from casinos in neighboring states.
Gov. Chris Christie wants to revive the casinos by creating a state-controlled tourism district to oversee the gaming and entertainment zones. Even before the governor unveiled his plan last month, Mayor Lorenzo Langford began holding a series of summit-style meetings with community leaders to discuss ways to reduce blight and make the city safer. Gomes is a member of the mayor's planning group.
"I love what the governor is doing. I love what the mayor has been doing with the city, too," Gomes said. "I think the combination of what the governor and mayor are doing and what I can do will help bring the city back to what it was in the '20s and '30s."
Resorts, formerly known as Haddon Hall, is a hotel that dates to Atlantic City's tourist heyday in the 1930s. The hotel was transformed into the city's first casino in 1978, but despite its rebirth as a gaming hall, the building's aged physical condition has been an expensive headache for its succession of owners over the years.
Wall Street analysts believe Resorts' future is bleak. They say Resorts, the Atlantic City Hilton Casino Resort and Trump Marina Hotel Casino could be casualties of the fragile economy and competition from casinos in Pennsylvania, New York and Delaware.
"We believe that Atlantic City may experience the closing of two or more properties by year end 2011," Andrew Zarnett, managing director of Deutsche Bank, warned in a recent research report. "The likely candidates that may shut down are Resorts, A.C. Hilton and possibly Trump Marina, as each of those properties continues to post negative operating income and lose market share every month."
Lawrence Klatzkin, managing director of Chapdelaine Credit Partners, said Resorts is at "high risk" for shutting down if its finances do not improve.
Resorts warned in an April tax filing with the New Jersey Casino Control Commission that it has been suffering from "severe cash shortages" that could jeopardize its chances for survival while it searches for a buyer. Resorts posted an $18 million gross operating loss in 2009 and has seen its gaming revenue plummet nearly 17 percent through the first six months of this year.
Before the lenders took over, Resorts was owned by Colony Capital LLC, a private real estate investment company that bought the casino in 2001 for $140 million. Colony surrendered ownership when the lenders threatened to foreclose on the property.
Nicholas L. Ribis, Colony's former partner in Resorts, agreed to manage the casino for the lenders while a buyer was sought. Ribis said shortly after the lenders took charge that he was interested in acquiring the casino. Ribis' office said he was traveling Friday and was unavailable for comment.
Contact Donald Wittkowsk | Press of Atlantic City
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