While Donald Trump waits to see if he will be forced to part with his legendary hair at Wrestlemania Sunday night (April 1), AC Gambler can report exclusively that he will be parting with one of his Atlantic City casinos now that a private-equity group, led by the members of U2, will purchase Trump Marina from Trump Entertainment, in a cash deal.
Elevation Partners LP will take control of the casino/hotel as soon as it receives regulatory approval from the state Casino Control Commission. Sources tell AC Gambler that the group hopes to take over day-to-day control of the casino before the end of 2007.
Donald Trump recently hired Merrill Lynch to examine “strategic corporate options,” which included the possibility of a sale of any or all of Trump’s three Atlantic City properties. While some expected Trump to package the three casinos for approximately $2.5 billion, sources close to the deal tell AC Gambler that he was willing to let the Marina to be sold separately because “[Trump Marina] will be the easiest of the three properties to sell.”
According to the same source, the selling price will likely be approximately $550 million - approximately $80 million more than most analysts believe the property is currently worth. “The resort is dated, but it has the most appeal to the buyers, who considered all of Trump’s properties before bidding on the Marina.”
While this is the largest purchase that Elevation Partners has made, the company encompasses real estate, a hotel, a chain of restaurants, a clothing line, and private equity investments, so the purchase of Trump Marina, though ambitious, does not conflict with the company’s previous acquisitions.
As band frontman Bono said in Bono on Bono, “U2 were never dumb in business. We don’t sit around thinking about world peace all day.”
The group, which has sold tens of millions of records during its storied career, has long been known for its financial acumen. In a recent piece on Bloomberg.com, entitled “Bono, Who Preaches Charity, Profits From Buyouts, Tax Breaks,” authors Richard Tomlinson and Fergal O’Brien noted that, during the 1990s, “U2 used nonexecutive directors who were residents in an offshore tax have to limit the amount [of taxes] paid” by the four members of the band.
“U2 are arch capitalists - arch capitalists - but it looks as if they’re not,” music producer Jim Aiken said in the Bloomberg piece.
Still, while the band’s business acumen is legendary, its members are not averse to taking risks, a fact that becomes evident when one examines the deal to purchase Trump Marina.
Sources who have seen the tentative deal indicated that once the purchase agreement is signed, the new ownership group will begin immediately to transform the property, beginning construction even before the deal closes officially.
The first change will be to the name of the property. In a nod to its roots, the new resort will be named The Castle at the Marina, an allusion to the original name of the resort, Trump Castle. In addition, the exterior of the casino will be modified to reflect the new name.
“They’re going to make the building look like Slane Castle,” the Irish castle in Slane village, County Meath, on whose grounds U2 played several memorable concerts, and where the band recorded part of its legendary fourth album, The Unforgettable Fire. “They are trying to make it into a Las Vegas-style property in order to better compete with the Borgata, the new and improved Harrah’s and the planned MGM-Mirage project.”
In addition to the cosmetic changes on the exterior, Elevation Partners plans to expand the resort.
“They’re planning on adding a 10,000 seat arena, which will serve several purposes. First, it will allow the band to have a permanent home on the East Coast of the United States, where it plans to perform between 30 and 50 shows a year. With 100 million people living within several hours of Atlantic City, the band expects to have no problem selling out several shows a month.”
The source added that the arena will also allow The Castle to compete with Borgata’s Event Center, which draws big-name acts to its smaller room.
“The Grand Cayman Ballroom is a good-sized room, but it’s not a great concert venue. With this new arena, The Castle will definitely compete with Borgata and will be able to offer bands the opportunity to play in front of more fans. In addition, the added seating capacity will allow acts to keep ticket prices more in line with those charged at other tour stops - a major problem for Borgata, where fans are forced to pay hundreds of dollars for tickets that go for half that at most other venues.”
Other changes planned for the new resort include:
- A new shopping and entertainment arcade, Zoo Station, which will compete with Tropicana’s The Quarter. The 50,000 square-foot expansion will include a new steakhouse, The Unforgettable Fire; 11 O’Clock Tick Tock, a high-end watch boutique; Crumbs From Your Table, a dessert restaurant; Lemon, a tea and coffee shop; Pop Mart, a new gift-shop; Red Hill Mining Town, an Irish pub that “will make you think you’re in Dublin;” and a disco appropriately titled Discothéque.
- A new sushi restaurant in the hotel, The Ocean.
- New felt for all the gaming tables which will cause the band's name to appear to float over the table, thanks to new overhead ultraviolet lights. New gaming chips that will resemble small records, with each denomination bearing a picture of one of the band’s album covers. In addition, the faces of the four members of the band will adorn the four kings in every deck of cards used at the gaming tables.
- Twelve new "super-luxury" suites, which will include full concierge service, a bar stocked with “at least 40” types of whisky, a dance floor, and a professional sound system manned by a DJ who will spin different mixes for each suite. In addition, before suite guests arrive the first time, they will be emailed a concert rider, which they will fill out with their specific requests and send back so that their rooms are stocked properly upon arrival. In addition, at Bono's request, there will be no fewer than 20 full length mirrors per suite.
- An ultra-lounge, One Tree Hill, which will include a VIP room, and a second, hidden room where band members will likely host their own VIP guests when they are in town.
- A complete re-theming of the casino floor and public areas to “better reflect the Irish experience.” The source said, “Look at the success the Indians have had in Connecticut. They plan to play up the Irish theme without making it too tacky.”
- The high-roller Marina and Yacht clubs will be renovated and renamed the Silver and Gold clubs respectively. In addition, the Millionaires Club will be renamed Hawkmoon 269.
The source said that the new management planned to keep “as many staff members as want to stay with us,” and will expand the staff. “We’re going to be doing a lot of hiring. In addition to the front of house people, we’re going to be doing a lot of construction.” The new management hopes to have all construction completed by April 1, 2009, an aggressive schedule that can only be met if the contracts are signed in the next two months.
"When the renovation is complete, you're not going to recognize the place," the source said. "For example, the casino will be renovated completely. We might keep the guitars above the Wild Jackpots machines, but that's about it."
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