Nevada casino operator buys Atlantic City resort

John Curran

Thursday, March 29, 2001 | 10:16 a.m.

ATLANTIC CITY -- The grand dame of the Boardwalk has a wealthy new partner who wants to restore some of her faded luster.

Colony Capital LLC, a private investment firm with $6 billion in assets, won regulatory approval Wednesday to buy Resorts Atlantic City for $140 million. Colony also owns Lake Tahoe-based Harveys Casino Resorts.

The state Casino Control Commission voted 4-0 to grant a temporary casino license to Colony Capital and its chairman, Thomas J. Barrack Jr., allowing the sale of the 133-year-old Boardwalk landmark.

The deal is expected to close Friday.

Unfazed by the casino's struggles under current owner Sun International, Barrack is counting on former Trump Hotels CEO Nicholas Ribis and Resorts President Audrey Oswell to help resurrect Resorts' fortunes.

He told regulators he believes Resorts can effectively compete with the other casinos by stressing its history and its elegance -- "a return to classics," he said -- and by bolstering the confidence of the 2,800-employee work force.

He said the appeal of the Boardwalk, the ocean and the East Coast's dense population base made it an attractive investment.

"We're enthusiastic and excited about the opportunity to do this," Barrack said.

Opened in 1868 as the Chalfonte Hotel, it was combined with adjacent Haddon Hall in the 1920s and flourished during Atlantic City's heyday. Purchased by Resorts International Inc. in 1976, the building opened as Atlantic City's first casino on May 26, 1978.

Merv Griffin bought it in 1988 and operated it for eight years, until Sun International took over in 1996. But Sun had nothing but bad luck with it after buying the property for $350 million.

Sun originally proposed a $150 million makeover but later scaled it back to $50 million. But the disruption of the renovation work scared away many of Resorts' regulars.

The company endured several management shake-ups as it struggled to recoup its investment. Ultimately, Sun International Chairman Sol Kerzner gave up on it, agreeing to sell for less than half what he paid for it.

Colony Capital, based in Beverly Hills, Calif., is an international investment firm that specializes in real estate assets.

"This is a new breed in town," Deputy Attorney General Denis Dooley II told commissioners at the hearing.

Ribis said Colony plans to add a 500-room hotel tower and is examining the possibility of developing a 10-acre property next door that is currently used for surface parking.

Ribis, 55, who left Trump's organization last June, will be directly competing against his former employer in his new role as vice chairman of the Resorts operating committee.

He downplayed any rivalry Wednesday. "I had a great run with Mr. Trump. He's a great guy. He's still my friend."