ichard Fields, chairman of Coastal Development, and Trump Entertainment Resorts said in a joint statement they agreed to reduce the sale price of the Marina to us$ 270 million, from us$ 316 million, and waive the deadline for financing commitments. In addition, Trump Resorts can terminate the agreement if it does not close by May 28, although it has the option to extend that by 60 days if Coastal needs time to obtain regulatory approvals.
Coastal has partnered with singer Jimmy Buffett to transform the Marina into a Margaritaville casino, but New Jersey casino regulators said last week they would require Buffett and his Margaritaville Corporation to qualify for a state casino license.
In a show of faith that Coastal was serious about buying the Marina, it agreed to release us$ 15 million to Trump Resorts that it had held in escrow since the agreement was announced in May. Coastal has also put another us$ 2 million in escrow, and Fields has asked to start renovating the Marina before the deal closes. "We’re confident that it’s going to close, and we think it’s still the right thing for the future of the Marina and the company," said Trump Resorts CEO Mark Juliano.
The news was not entirely unexpected but industry observers expressed relief just the same. Although Fields, a one-time Trump protégé, has said for weeks he has financing, analysts had worried the market meltdown and credit crunch would derail the deal, giving Trump Resorts no choice but to restructure yet again.
The company emerged from Chapter 11 bankruptcy protection only 3 1/2 years ago, but has struggled along with the rest of Atlantic City, where the 11 casinos have wrestled with a smoking ban, a slowing economy and intense competition for gamblers.
Atlantic City casino revenue fell 15 % in September and 6.3 % for the first nine months of the year. Although a full smoking ban that has been implemented since mid-October will be lifted in mid-November, analysts still think the market has a way to go before it recovers. "We believe with or without the smoking ban, things will get worse (before they get better)," Deutsche Bank analyst Andrew Zarnett wrote in a recent note to investors.