After purchasing the Trump Taj Mahal in March, it has now been announced just how much Hard Rock International paid for the property.
The Trump Taj Mahal was only up for sale for a very short time by its then owner Carl Icahn before Hard Rock International decided to scoop up the property. The venue will undergo major renovations and be rebranded as a Hard Rock property, hopefully to open by next summer. During the process, it was made known fairly quickly that Hard Rock was purchasing the property but it was not revealed as to how much the Seminole Tribe, the group behind the company, paid during the acquisition. After a recent filing this week, we now know that the tribe paid only $50 million for the venue.
Super Low Purchase Price
According to filings within the United States Securities and Exchange that were reported by Icahn, the property was sold for $50 million. When the venue opened in 1990, it had cost $1.2 billion to create. With this new purchase price, the Hard Rock was able to acquire the property at basically 4 cents on the dollar. This is a major investment and at such a low price, the Hard Rock is sure to make their money back fairly quickly.
A little History
The Trump Taj Mahal opened in 1990 after Trump spent $1.2 billion on the project, with more than $60 million of that amount used in junk bonds. One year later, the property had to file close to $3 million debt. By 2009, Trump had basically disassociated with the brand but did still have a small stake in the parent company, Trump Entertainment Resorts. This stake was done away with in 2016 when Icahn purchased the parent company out of bankruptcy.
Icahn had plans to reopen the venue but during the acquisition of the property, he asked if pension plans and health insurance of employees could be done away with. The bankruptcy court allowed this so Icahn pressed forward. However, employees were not happy about this change and by July of 2016, they were on strike. The strike continued until October when Icahn announced the closure of the property. Close to 3,000 individuals were out of work and Icahn was ready to rid himself of the property.
The closing of the casino marked the 5th time a venue had shut down since 2014. Four casinos in Atlantic City closed down in 2014 and the Trump Taj Mahal was the latest loss. However, with the Hard Rock now in possession, the venue should be able to reemerge as a top destination for gamers.
Hard Rock International’s Plans
Hard Rock International plans on spending around $275 million on the remodeling efforts to get the former casino back in order. The venue will be renamed the Hard Rock Hotel & Casino Atlantic City and if all goes according to plan, will reopen in the summer of 2018. The Hard Rock will have 2,400 slot machines on the gaming floor as well as 130 table games. There will also be non-gaming amenities added.
According to Jim Allen, the Chairman of the Hard Rock International group, the venue will create around 1,000 construction jobs during the remodeling phase and as many as 3,000 jobs that will be permanent once the redesigning phase has been completed.
It will be interesting to see how well received the casino will be once it changes hands and players hit the gaming floor. The Hard Rock brand is quite popular and players should want to spend time within the new gaming facility once opened.