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Atlantic City Hilton Casino Resort in New Jersey Loses the Right to
Use Hilton Name as Hilton Ends their Licensing Agreement

By Donald Wittkowski, The Press of Atlantic City, Pleasantville, N.J.McClatchy-Tribune Regional News

July 01, 2011--ATLANTIC CITY -- The financially troubled Atlantic City Hilton Casino Resort has lost the right to use the iconic Hilton name that has graced the property for the past 15 years. Already, the Hilton has started calling itself "ACH" in its promotional literature and on its website.

John Forrest Ales, a spokesman for Hilton Hotels & Resorts, confirmed Thursday that the hotel chain has ended a licensing agreement that allowed the Atlantic City casino to use the name.

"It's not recognized as a Hilton," he said. "If the agreement is terminated, the property can no longer be part of the Hilton brand."

Ales declined to say why the licensing agreement was ended, but noted that the Hilton chain wants to "protect our name and identity."

For the time being, the Hilton name remains on the casino hotel, its table games and slot machines, but it will have to come off eventually. The timing remains unclear.

"It's certainly something that is expected to happen," Ales said.

Casino spokeswoman Tina Belluscio declined to comment. Lisa Baker, a spokeswoman for the Hilton's owner, Colony Capital LLC, also declined to comment.

Calls to the Hilton on Thursday were answered with the greeting "ACH." The Hilton's website and the casino's promotional literature that is mailed to gamblers now bear the ACH name.

The Hilton, the biggest money loser among Atlantic City's 11 casinos, is going through the name change at the same time that it is trying to find a new owner. Lenders forced the property's sale this year after the Hilton defaulted on its mortgage, but a buyer has not yet emerged. International investment bank Houlihan Lokey has been hired to sell the Boardwalk casino while a foreclosure fight between the Hilton and its lenders has been put on hold.

In 2010, the Hilton suffered an $18.9 million operating loss, more than any other Atlantic City casino. Its $7.3 million operating loss in the first quarter of this year also made it the industry's worst performer.

The Hilton, Atlantic City's smallest casino, has been through a succession of name changes and operators since it first opened in 1980 as the Golden Nugget, then owned by Las Vegas gaming mogul Steve Wynn. The revolving door of ownership began in 1987 after Wynn sold the casino to Bally Manufacturing Corp. for $440 million.

Over the years, the casino has alternately been known as Bally's Grand, The Grand and then finally the Hilton starting in 1996, when Hilton Hotels Corp. took ownership.

Hilton Hotels spun off its gaming division into a new company on Dec. 31, 1998. The Hilton's successor company agreed to sell the Atlantic City casino to Colony Capital in 2004 for $1.24 billion as part of a four-casino deal in New Jersey, Mississippi and Indiana. Despite the ownership switch to Colony, the Hilton name remained on the casino through the licensing agreement with the hotel chain.

Barring a sale or settlement with lenders, the Hilton could end up the same way as its former sister property, Resorts Casino Hotel. Lenders took control of Resorts from Colony Capital in 2009 after the casino defaulted on its mortgage. Resorts was sold for $31.5 million in December to a group headed by Atlantic City gaming executive Dennis Gomes and New York real estate magnate Morris Bailey.

Colony Capital is a private real estate investment firm based in California. Colony also owns the Las Vegas Hilton casino hotel, but is losing the right to use the Hilton name at that property, too. Colony disclosed this week in a federal securities filing that the Hilton hotel chain intends to terminate the licensing agreement in Las Vegas beginning Jan. 1, 2012.

Ales noted that the Atlantic City licensing agreement ended earlier this year, but he could not say exactly when. Hilton's decision to terminate the Las Vegas agreement was not related to Atlantic City, he said.

Contact Donald Wittkowski:



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