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Atlantic Club sold to Florida development company

Atlantic Club sold to Florida development company

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Atlantic Club Closed

The self parking garage entrance is closed at the former The Atlantic Club Casino Hotel in Atlantic City on Monday Jan 13, 2014. (Staff Photo by Michael Ein/The Press of Atlantic City)

ATLANTIC CITY — The shuttered Atlantic Club Casino Hotel has been sold just four months after it was closed down and stripped for parts in a bankruptcy deal involving two larger rivals.

The new buyer is TJM Properties Inc., a Florida development firm that is adding the Atlantic Club to a real estate portfolio that already includes another Atlantic City landmark, the old Claridge Casino Hotel.

TJM spokeswoman Sherry Amos said the sale closed Thursday, but the purchase price was not immediately disclosed. TJM is studying development options for the 800-room hotel complex, but it will not reopen the Atlantic Club as a casino.

“TJM is not planning a casino,” Amos said. “They are evaluating all of the different options for the property.”

Reopened Claridge part of the return of the non-casino hotel to A.C.

The Atlantic Club, one of Atlantic City’s smallest and most financially troubled casino hotels, was shut down Jan. 13 following a failed deal by online global gambling giant PokerStars to buy it for $15 million.

When PokerStars fell out of the picture, Caesars Entertainment Corp. and fellow casino company Tropicana Entertainment Inc. paid a combined $23.4 million to acquire the Atlantic Club in a bankruptcy sale in December. Caesars took possession of the Boardwalk property and buildings for $15 million, while Tropicana bought the Atlantic Club’s slot machines and table games for $8.4 million.

Neither Caesars nor Tropicana had any interest in operating the Atlantic Club as a casino hotel in Atlantic City’s struggling gambling market, so the complex shut down Jan. 13, throwing 1,600 employees out of work.

As the building’s most recent owner, Caesars Entertainment reportedly was seeking a deed restriction prohibiting the Atlantic Club from ever being used as a casino again. State Sen. Jim Whelan, D-Atlantic, complained in February that the deed restriction simply was Caesars’ way of preventing new competition for its Bally’s, Caesars, Harrah’s Resort and Showboat casinos in Atlantic City.

Caesars Entertainment similarly imposed a deed restriction when it sold the old Claridge Casino Hotel to TJM Properties in February for $12.5 million. TJM reopened the Claridge over the Memorial Day weekend as a standalone, 500-room luxury hotel.

“They’re optimistic about the potential growth opportunities in the Atlantic City market,” Amos said of the company.

TJM is a privately held real estate firm controlled by Terence J. McCarthy, of St. Petersburg, Fla. In addition to the Claridge, the company owns 10 hotels in the Tampa Bay, Fla., area. The company has also managed or developed homes, commercial buildings and senior-living communities throughout the southeastern United States.

TJM has a number of options as the Atlantic Club’s new owner. Some have suggested the Atlantic Club could be resurrected as a noncasino hotel or be redeveloped for condos or apartments. TJM could also keep the building in mothballs while it shops for another buyer willing to pay a higher price.

Amos, however, said TJM is looking to redevelop the Atlantic Club after the company completes the reopening of the Claridge. The Claridge opened its guest rooms over the Memorial Day weekend, but the restaurants, lounges and other amenities are still being brought online.

TJM could consider demolishing the Atlantic Club for redevelopment, but that would create more vacant land at a time when Gov. Chris Christie and the Casino Reinvestment Development Authority, the state agency that oversees the city’s Tourism District, are trying to make the resort town more attractive to visitors.

Atlantic Club’s relatively remote location at the southern tip of the Boardwalk casino zone might be an obstacle for its rebirth. The site is detached from the hustle and bustle in the heavily developed middle part of the Boardwalk.

Atlantic Club originally opened in 1980 as the Golden Nugget, an upscale casino owned by Las Vegas gambling mogul Steve Wynn. But Wynn sold the property in 1987 for $440 million, beginning a succession of ownership and name changes that ultimately robbed the property of its cache. Over the years, it was alternately known as The Grand, Bally’s Grand, the Atlantic City Hilton Casino Hotel, ACH, and finally the Atlantic Club.

Colony Capital, a California-based real estate investment firm, bought the then-Atlantic City Hilton in 2005 as part of a $1.24 billion deal for four casinos in New Jersey, Mississippi and Indiana. At that time, the Hilton was valued at $513 million.

The casino’s losses mounted under Colony Capital’s ownership. Colony’s proposed $15 million deal with PokerStars in 2013 for the Atlantic Club reflected just how far the casino’s value had plummeted.

PokerStars, the world’s largest poker website, had planned to use the casino as a base for its Internet gambling operations. However, the deal collapsed amid concerns PokerStars would not qualify for a New Jersey casino license because of an indictment against its founder for allegedly conducting illegal online gambling operations.

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