Icahn eyeing expansion to turn around AC Sands

John Curran

Friday, May 21, 2004 | 8:55 a.m.

ATLANTIC CITY -- Struggling to keep pace with its competitors, the troubled Sands Hotel & Casino is planning for an expansion in hopes of improving its luck.

It isn't much of a gamble: Historically, casino expansions -- especially those that add hotel rooms -- have helped boost the bottom lines of casinos because gamblers who stay overnight spend more money at the tables.

Hamstrung by its location and a lack of available land on which to expand, the 600-room Sands is taking a beating from competitors, including the new Borgata Hotel Casino & Spa.

Last year, it posted a $17.9 million loss, capturing the lowest market share -- 4.1 percent -- of any Atlantic City casino.

The Sands, which was bought by billionaire Carl Icahn in 2000, has yet to make any major investment to turn the tables on its competitors.

That could change soon.

Interim President George Toth met this month with Gov. James E. McGreevey and state Casino Reinvestment Development Authority Executive Director Curtis Bashaw to discuss the possibility of state funding for a Sands expansion.

While no concrete plans were divulged, Toth said the Sands is beginning what it calls an 18-month "research and development process" aimed at devising an expansion plan.

"Rooms translate to revenue," Toth said. "Everybody's built rooms except for us. There's no secret to that formula. We would feel that we'd have the same positive result everyone else has."

One possibility lies across Pacific Avenue, in a U.S. Post Office building. The CRDA has committed to $5 million for relocation of its postal operations to other sites in Atlantic City.

The 40,000-square-foot site could be used for rooms, but Toth wouldn't say what is being considered.

"We're looking at the entire project as one that could be a cornerstone in the center of the city. I don't want to limit what we could or would put there," he said.

In the meantime, the Sands is remodeling its 15th floor into 17 high-roller suites and it is building a new pit area aimed at appealing to them.