|By Caitlin Dineen, The Press of Atlantic
City, Pleasantville, N.J.McClatchy-Tribune Regional News
April 07, 2011--ATLANTIC CITY -- The developer who bought the site of the former Playboy Hotel and Casino and Trump World's Fair Casino in 2005 paid Trump Entertainment Resorts Inc. an additional $5.5 million recently to remove a clause from the site's deed that prohibited construction of a casino on the Boardwalk site, a Trump executive said Wednesday.
When purchased for $25.15 million in 2005, the parcel, which is located at the intersection of Florida Avenue and the Boardwalk, could not be developed into a new casino, the sale agreement stated.
However, the clause that restricts construction of a casino was lifted about three weeks ago, said Robert Griffin, chief executive officer for Trump Entertainment Resorts Inc.
Developer Bruce E. Toll, of BET Investments, originally planned to build luxury condominiums on the 2.5-acre beachfront property.
He outbid Donald Trump and Philadelphia-area attorney Andrew Barroway for the site. Toll is a founder and vice chairman of Toll Brothers Inc., a luxury homebuilder group.
Griffin said BET and Toll Brothers officials did not indicate whether they intended to construct a casino on the site, but, without the restriction, BET Investments could technically build a new casino there.
Toll and BET Investment officials could not be reached for comment Wednesday.
During Wednesday's New Jersey Casino Control Commission meeting, commission members unanimously approved Avenue NJ Entertainment LLC and Avenue NJ Entertainment Holdings LLC to take ownership of the three Atlantic City Trump casinos: Trump Plaza, Trump Taj Mahal and Trump Marina. Additionally, Marc Lasry, co-owner of Avenue Capital Group hedge fund, was approved as the new chair of Trump Entertainment Resorts Inc.
Robert Symington, who was approved as a member of the Trump Entertainment board of directors Wednesday, said about $5 million from the transaction to lift the clause may go toward reducing the $332 million in overall debt Trump Entertainment is saddled with.
Another option is that the money will be put toward capital expenditures for two of the three current Trump casinos.
Trump Marina Hotel Casino, the weakest performing Trump casino, was sold to Landry's Inc., a gaming, entertainment and restaurant conglomerate that owns the Golden Nugget casino hotels in Laughlin and Las Vegas, Nev.
The casino was sold for $38 million and will be rebranded the Golden Nugget once the sale is approved during the May 25 Casino Control Commission meeting. About $30 million from that sale also will go toward paying down outstanding debt.
Joseph Weinert, senior vice president of the Linwood-based casino consulting firm Spectrum Gaming Group, speculated the removal of the clause was a business deal that would allow Toll and BET Investments to keep their options open.
"If anybody has anything down the road, it would make sense to keep your options open," said Weinert, who is not familiar with BET Investments or their plan for the site.
Weinert said the parcel is in a prime location for development because it is on the Boardwalk and is, essentially, attached to the seaside entertainment venue Boardwalk Hall.
He said the base price to build new in Atlantic City has dropped significantly in the last four or five years.
Additionally, with Gov. Chris Christie's February approval for the construction of two, smaller boutique casinos within the city's limits, the site may be ideal for the construction of a smaller casino, Weinert added.
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