Las Vegas - MGM Mirage sells off TI property

http://www.lvrj.com/news/36156734.html

Former New Frontier owner Phil Ruffin is buying the Treasure Island from MGM Mirage for $775 million, sources confirmed Sunday night. The deal is expected to be announced today.

Ruffin, a Wichita, Kan., businessman, sold the New Frontier in May 2007 for more than $1.24 billion to Elad Group. The aging casino was closed in July 2007 and demolished in November 2007.

MGM Mirage officials would not comment on the deal and Ruffin could not be reached. The transaction is a surprise, coming in the middle of the current global credit crisis that has dried up lending markets to the gaming industry. Also, other development projects have stalled, most notably Boyd Gaming Corp.'s $4.8 billion Echelon, which was shut down in August and may be postponed until 2010.

Ruffin owns the seven acres of land that houses the $1.2 billion Trump International Hotel & Tower. He is considered a part owner in the 1,282-unit hotel and condominium tower with New York billionaire Donald Trump. He appeared at the property's opening ceremony in April.

MGM Mirage acquired Treasure Island as part of the company's $6.4 billion purchase of Mirage Resorts in 2000. The pirate-themed casino was opened in 1993 by Steve Wynn at a cost of $450 million as a sister resort to The Mirage.

Treasure Island has 2,885 rooms, including 220 suites, and a 90,000-square-foot casino.

Under Wynn's ownership, the Strip resort catered to families and featured live-action pirate battles every 90 minutes in Buccaneer Bay at the front of the resort.

MGM Mirage abandoned the family theme in 2003 for a more contemporary adult-oriented theme and marketed itself as TI. "The Sirens of TI" replaced the whimsical pirate battle.

Ruffin paid $167 million for the New Frontier in 1998 and was seeking an equity partner to help him redevelop the resort and its 36 acres for several years.

However, he was considered the savior of the New Frontier when he acquired the casino from the Elardi family.

The property had been the site of the nation's longest ongoing work stoppage when more than 550 employees, backed by the Culinary Workers Union, walked off the job in September 1991.

The workers spent 2,325 days on the picket line, going back to their jobs at 12:01 a.m., Feb. 1, 1998, when Ruffin took possession of the casino.

The New Frontier was imploded to make way for a planned $5.7 billion mixed-use development modeled after the Plaza Hotel in New York, which Elad Group owns.

However, the collapsing credit markets have shelved the project.

Firstly, I think this is a good idea for MGMMirage, especially with the financing difficulties they were having holding their end of the bargain with Dubai re CityCenter.

Secondly, I think it'll be very interesting to see how the details work out. I assume that the tramway between Mirage and TI will stay functional...will the table limits stay the same? Will they discount room rates more aggressively? I always thought that TI had trouble finding its niche within the overall MGMMirage family.

While it is a very good deal for Ruffin,and it might be good for the MGM group,it is not good news for the Treasure Island property itself IMO
While the much hated Elardi family did the New Frontier property no favors Ruffin bought it pretty much for the land-and let the hotel/casino really slide down the tubes.

I fear the same will happen with the Treasure Island-and I really likethe TI !

Just got a promo from TI for $49 rooms most of the rest of this month. Hope Phil Ruffin got a good deal...

While I tend to agree that this may not spell great things for ti, I certainly don't think this was a monopoly-style purchase for the land. Ti is relatively small, only about 19 acres, and adjacent only to the Mirage and Fashion Show Mall, neither of which seem likely to go away any time soon.

I suspect what most people would like to see is the property continue to cater to mid-rollers by treating them well, comping wisely, and having decent rules at table games with low limits. I can't imagine trying to bring back the "family friendly" concept again. I think it should be pretty easy for them to maintain their status as a better choice than the other not-quite-so-upscale casinos nearby (Casino Royale, Harrah's.)

Please don't mess with my Phỏ (http://treasureisland.com/pages/dining_coffeeshop.asp)!

While I tend to agree that this may not spell great things for ti, I certainly don't think this was a monopoly-style purchase for the land. Ti is relatively small, only about 19 acres, and adjacent only to the Mirage and Fashion Show Mall, neither of which seem likely to go away any time soon.

I suspect what most people would like to see is the property continue to cater to mid-rollers by treating them well, comping wisely, and having decent rules at table games with low limits. I can't imagine trying to bring back the "family friendly" concept again. I think it should be pretty easy for them to maintain their status as a better choice than the other not-quite-so-upscale casinos nearby (Casino Royale, Harrah's.)

I agree. With the recent remodel of the hotel...I don't see a reason for them to turn the property in ANOTHER direction in the near future. Also, with tough times ahead in the foreseeable future, I'm hoping that a favorable comp structure will come out of there to lure players away from Harrahs/MGM/etc.

Anyone know the difference in size of the Frontier's lot compared to TI? I haven't spent much time in TI and I was never in the "New" Frontier before it closed, but it seems to me to be an amazing sign of the times (and an incredibly shrewd stroke of timing on Ruffin's part) that he sold the Frontier for $1.25 billion (for its land only basically) and bought the TI for $775 billion, but part of that could be due to a large difference in acreage I suppose.

The New Frontier sat on a huge lot=much bigger than the hotel/casino needed with a very large Strip Frontage and access via a well paved 4 lane side street,The Strip,and Industrial road.
Ti does not have that much land-but it is prime.

Anyone know the difference in size of the Frontier's lot compared to TI? I haven't spent much time in TI and I was never in the "New" Frontier before it closed, but it seems to me to be an amazing sign of the times (and an incredibly shrewd stroke of timing on Ruffin's part) that he sold the Frontier for $1.25 billion (for its land only basically) and bought the TI for $775 billion, but part of that could be due to a large difference in acreage I suppose.$775 million, actually.

It does seem to be sell high, buy low. I'm thinking MGM Mirage is divesting to achieve some cash flow cushion for the 12-18 month dark times to come.

TI itself has reasonably good bones as far as I know, and they just finished a room renovation. TI's location is fantastic - easy walks to Venetian, Palazzo and Wynn/Encore, plus the shopping at Fashion Show, all accessible by up-and-overs so you're never at street level on the strip. Even if the tram to Mirage goes away you can still walk there.

Never been into TI but makes it a possible choice if there are some good offers for my return to LV in the new year.

I will be trying for 3-0 sitting at a table when a bad beat jackpot hits.

More proof that Steve Wynn knows how to do Vegas right, and MGM/Mirage lacks the magic touch. Treasure Island was a great family property, but the last time I went there for a Cirque show and wandered around, the entire property seemed to be taken over by budget conscious frat boys from SoCal looking for a partypad.

Call me a snob, but I tend to steer clear of resorts which double as college hangouts, like Mandalay, Monte Carlo and Treasure Island.

It will be interesting to see what direction the new ownership takes with the property.

Anyone know the difference in size of the Frontier's lot compared to TI? The New Frontier's lot is 35 acres.

Good riddance. I hate TI, they have the 6:5 blackjack table all over the front of the casino, but then 3:2 table in the back. Sleazy.

Interesting move... was never really a big fan of TI, but could never put my finger on why. Will be interesting to see where this goes.

Not a bad deal. Let see.

Buys crappy Frontier for $150 million
Sells even crappier Frontier for $1.25 billion
Buys TI for $775 million

Enough cash left over for a vacation and a job well done!

I think he could of got it for $600mill if he waited. MGM would be despeate in 6months and on their knees. CityCenter is going to flood Vegas with way to many rooms and supply/demand will sink rates even further.

Vegas is a very funny place with very strange licensing.
Thus the "crappy"frontier(which at one time was actually ok)was more valuable for its land and the gaming licence than for the casino/hotel.

You will notice that in take over rebuilds they often leave a very small bit of the old casino(usually the part of the building which includes the vault-since that is a major investment)and build onto,around that.Some wierd wording in some code about that,just as there is some strange advantadge to opening before your planned opening date.It really is facinating stuff to learn about.

Slightly OT - the owner willl have to put up the one-day trailer / tent for gaming on the Frontier site soon (this summer?); have to do so every two years (I think) to keep the license active.

Back OT - Ruffin cashing out on the New Frontier was genius, although I think he really probably could have picked up a better deal from MGM. Perhaps he really might have gotten bored as some of the articles suggest.

UPDATE: The Gaming Control Board has approved the sale. If the Gaming Commission gives final approval on March 19th, Phil Ruffin intends to close the deal by March 31st:

http://www.lvrj.com/news/breaking_news/40738397.html

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