President Casinos unveil resort plans

Wednesday, May 14, 1997 | 11:59 a.m.

President officials discussed the plans after a closed door meeting Tuesday with the Mississippi Gaming Commission, which gave approval to the deal.

Tentative plans include tearing down the existing Broadwater Resort and Broadwater Tower hotels.

The company said it will pay $40.5 million for 260 acres of land that includes the two hotels, Broadwater Marina and the 18-hole Sun Golf Course. The marina is south of U.S. 90 on the Gulf of Mexico, with the other properties just across highway.

The company currently operates the President Casino, which leases space at the marina.

The property is now owned by BH Acquisition Corp. and John Connelly, who also is the chairman and principal stockholder of President Casinos.

President Casinos said it would finance the deal with $30 million from outside investors and $10 million from BH.

"We are very excited about this property and we think it is the best location for the next full-scale destination resort," said John Aylsworth, President's Chief Operating Officer.

"We would be interested in talking to other casino companies which would want to come in and share this project with us. We think there is enough acres where you could have multiple casinos and multiple hotels," he said.

Aylsworth said the project has no timetable nor firm partnerships in place. Connelly had negotiated a potential sale of the hotels to financier Allen Paulson, but nothing was worked out.

Last year, another casino company, Primadonna, agreed to buy the hotels, marina, golf course and President Casino site but later withdrew from the deal.

Primadonna's plans for the $300 million project were to tear down the 333-room Broadwater Resort, an art deco hotel built in the 1930s.

The question now is if President Casinos can pull off the deal. The casinos was one of the first to open on the coast and enjoyed tremendous early success. But it has suffered as larger competitors came on line.

The company, in fiscal year 1997, lost $8.8 million, and a recent Standard & Poor's report said the Biloxi casino broke even.

Andrew Zarnett, analyst at Ladenburg Thalmann in New York, said the company's plans present a "conflict in strategy." He said President Casino in Biloxi has been trying to bill itself as locals' favorite establishment and that new plans target the overnight traveler.

He said it "would be difficult" to compete with the existing Grand Casinos and the Mirage Corp.'s Beau Rivage, which is under construction.