Trump Plaza, the Boardwalk centerpiece of Donald Trump's onetime Atlantic City empire, was sold Thursday to a California company for $20 million in the cheapest of a series of bargain-basement deals for distressed gambling halls in the struggling New Jersey seaside resort.
The Meruelo Group of Downey, California, plans to close the deal by May 31. It is the lowest price ever paid for a casino in Atlantic City.
The company has not decided on a new name for the casino-resort, but said it will not continue to use the Trump name.
"Trump Plaza is one of the world's most recognized gaming resort destinations and is an integral part of the Atlantic City landscape," said Alex Meruelo, founder and CEO of the Meruelo Group. "Our company is thrilled to have the opportunity to become the new owners of this property, and we are firmly committed toward establishing it as one of the elite destinations in Atlantic City and on the East Coast."
"This is good news for the city, for the state, and for the Plaza," he said. "There is still considerable interest in this market."
Xavier Gutierrez , chief investment officer for The Meruelo Group, said the company plans to make a sizeable investment into the property, but could not yet predict what staffing levels would be.
The sale is subject to approval by New Jersey casino regulators.
Trump Plaza has about 900 employees. The president of the union representing most of them welcomed the sale.
"We're pleased somebody had the foresight to purchase this property; it's right in the center of Atlantic City," said Bob McDevitt, president of Local 54 of the Unite-HERE union. "We have a very good relationship with this company in Reno and we have a contract with them.
"Because of Trump Entertainment's problems, they really weren't able to run (Trump Plaza) the way it needed to be run," he said. "It's been in hibernation."
Trump Plaza, which cost $210 million to build, opened in May 1984 as one of Donald Trump's pet projects. The real estate mogul has since limited his dealings in Atlantic City to a 10 percent stake in Trump Entertainment Resorts.
Trump told The Associated Press he is a bit wistful to see his former properties in Atlantic City sold off and renamed.
"There was a period of time when Atlantic City was the hottest place in the world," he said. "I got out years ago, and my timing was very good. But the world turns. They're getting a very good location."
The sale leaves the company he once ran, Trump Entertainment Resorts, with just one casino, the Trump Taj Mahal Casino Resort.
Griffin also said his company would consider selling the Trump Taj Mahal, if the price were right. He said there have been no talks with potential buyers for the Taj thus far. The company sold the former Trump Marina to a Texas company that rebranded it as the new Golden Nugget in 2011.
"If someone comes in and makes an offer that makes sense, our board has shown that we are willing to do the right thing for our shareholders," Griffin said. "Blow me away with an offer, and I'll be happy to take it to the board."
Trump Entertainment Resorts plans to use proceeds from the Plaza sale to pay down its debt, which will be about $270 million after the sale, Griffin said.
Trump Plaza is one of the first casinos many visitors to Atlantic City see. It sits at the foot of the Atlantic City Expressway on the Boardwalk, directly next to Boardwalk Hall, and sometimes markets itself as being in "the center of it all."
It stands 39 stories over the Boardwalk, and has 906 hotel rooms, ranking it among the smallest of the city's 12 casinos, the most successful of which have 2,000 or more rooms apiece.
Trump Plaza has struggled mightily in recent years, despite its central location. It has become the worst-performing casino in town in terms of casino revenue. Last month, Trump Plaza took in less than $4.9 million, a decline of more than 40 percent from a year ago.
For all of last year, Trump Plaza won just over $102 million from gamblers — or about what the city's top casino, the Borgata Hotel Casino & Spa, wins in a good two months. Trump Plaza's winnings for 2012 were down 25 percent from 2011.
For the third quarter of last year, the most recent period for which statistics are available, Trump Plaza had a $2.35 million gross operating profit, down nearly 34 percent from the same period in 2011.
The sale price was also consistent with the fire-sale prices casinos have been going for lately in Atlantic City. Resorts Casino Hotel sold for $31.5 million in Dec. 2010. Trump Marina Hotel Casino fetched $38 million when it was sold in May 2011 and became the Golden Nugget.
Billionaire Carl Icahn bought the Tropicana Casino and resort out of bankruptcy court for $200 million worth of deeply discounted debt; the casino originally went on the market for about $1 billion when its former owners lost their casino license.
And The Atlantic City Club Casino Hotel is being bought by the parent company of the PokerStars website site for an as-yet undisclosed sum, which is expected to be a fraction of the $513 million its owners paid for it in 2005.