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November 22, 2009

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MGM Mirage to sell Treasure Island

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Sun file photo

MGM Mirage announced Monday that it will sell Treasure Island to former Frontier hotel owner Phil Ruffin. MGM Mirage has owned Treasure Island since May 2000.

By Sun Staff (contact)

Published Monday, Dec. 15, 2008 | 7:17 a.m.

Updated Monday, Dec. 15, 2008 | 2:51 p.m.

Updated story: For strapped casino giant, sale provides sure cash

Phil Ruffin, owner of the New Frontier, speaks during an interview on Tuesday, Oct. 21, 2003.

2003 file photo

Phil Ruffin, owner of the New Frontier, speaks during an interview on Tuesday, Oct. 21, 2003.

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MGM Mirage said this morning that its Treasure Island property will be sold to former New Frontier hotel owner Phil Ruffin.

MGM Mirage and Ruffin Acquisition LLC officially announced this morning that they have signed an agreement for $775 million. Phil Ruffin wholly owns Ruffin Acquisition LLC.

The purchase price to be paid at closing will be $500 million in cash and $275 million in secured notes bearing interest at 10 percent, with $100 million payable not later than 175 days after closing and $175 million payable not later than 24 months after closing.

The parties expect the transaction to close by the end of the second quarter of 2009.

MGM Mirage has owned Treasure Island since May 2000, when MGM Grand Inc. purchased Mirage Resorts Inc.

“We are extremely proud of the accomplishments of Treasure Island’s employees and management team in making it one of the must-see properties in Las Vegas,” said MGM Mirage chairman and chief executive officer James J. Murren in a statement. “This transaction creates value to our stakeholders through significantly increased liquidity and enhanced financial flexibility.”

Treasure Island has 2,885 rooms, including 220 suites, and a 95,000-square-foot casino. The resort also has 18,000 square feet of convention space and hosts Cirque du Soleil's "Mystere."

Ruffin, a Wichita, Kan., businessman, is the former owner of the New Frontier hotel-casino, which closed on closed on July 16, 2007 and was imploded in November 2007 to make room for a multibillion-dollar resort bearing The Plaza brand, and the $1.2 billion Trump International Hotel & Tower that opened March 31 on the Las Vegas Strip.

Treasure Island was built for $450 million by casino mogul Steve Wynn, and opened in 1993 featuring a public pirate show set on a replica ship in front of the building.

“We are very excited to be in a position to acquire such a stellar property in Treasure Island,” Ruffin said in a statement. “The property is in pristine condition, ideally located in the heart of the Strip and benefits from a wonderful team of outstanding employees. We are financially positioned to close on this transaction once all of the necessary approvals have been received."

MGM shares rose 81 cents, or 7.6 percent, to close at $11.50 Monday.

The Associated Press contributed to this report.

Discussion: 16 comments so far…

  1. By neiman1
    12/15/08 at 8:51 a.m.
    Suggest removal

    More independent properties are nothing but good for Las Vegas.

  2. By jfnance32
    12/15/08 at 9:36 a.m.
    Suggest removal

    Ruffin sold 34 acres of dirt for $1.24 billion.

    He paids $775 million for over 100 acres that includes hotel and other buildings in excellent condition.

    Sounds like he knows how so sell high and buy low.

    Of course he will not make much operational profit, if any, for the next couple of years.

    In 5 or 10 years from now he migh be able to sell it for 2 or 3 billion dollars.

    Good move.....Can I work for you?

  3. By BigStack
    12/15/08 at 10:23 a.m.
    Suggest removal

    Jf,

    You have it backwards. He'll make a ton fairly quickly. Why? Because he isn't loaded with huge debt payments. He can keep the place cheap and full, and steal business from the other casinos.

  4. By westvegas
    12/15/08 at 11:06 a.m.
    Suggest removal

    Fantastic news. Business ownership diversification is always good news for consumers. We need more of this!

  5. By denro
    12/15/08 at 11:07 a.m.
    Suggest removal

    Seems to be a function of the economy. Mr. K. sells, frees up some cash for other things (like maybe City Center), and Mr. Ruffin gets back into action. The good news about Mr. Ruffin from articles previously written, is he was a great employer. so everyone wins. I would say look for more of these types of transactions. Plus, this is probably a gift for Mr. Ruffin, considering what he got for the Frontier, which he sold with great top of the market timing. All JMO.

  6. By OG
    12/15/08 at 11:14 a.m.
    Suggest removal

    Wow. A great business deal and an independent player on the strip. Probably too soon to hope for an end to the near monopoly held by MGM and the like in Vegas, but at the very least a much needed break from the trend.

    Go Vegas Go!

  7. By hermit
    12/15/08 at 11:17 a.m.
    Suggest removal

    775 million is a steal for this property. Ruffin can sit back now and wait for his profit latter. Good ole midwest cunning, like Ralph Englstead from the old Imperial Palace days. For those with cash there are lots of great buys to be had.

  8. By johnevegas
    12/15/08 at 11:39 a.m.
    Suggest removal

    Mr. Ruffin, congratulations and please do not close Isla. It is one of the best Mexican restaurants/Tequila Bars in town!

  9. By LemonSky
    12/15/08 at 2:47 p.m.
    Suggest removal

    I know I'm in the vast, vast minority, but TI is my favorite resort/casino. I just like how it's classy, yet understated and unpretentious for a four-to-five star resort.

    I agree with a previous poster about Isla, but also keep Canter's, Francesco's, and Social House (not that they're on the chopping block). I think the buffet is one of the more underrated ones of all Vegas buffets.

    I'm not crazy about Kahunaville, but I suppose it caters to a certain demographic.

    As for the pool, it's nice and compact, but please stop booking DJs spinning cacophonous top 40, hip hop tripe--I know this music is de rigeuer for just about all pools that blast music, but it would be nice if we can hear 80s new wave :)

    As for changes, I'd kick Christian Audigier out on his pompous ass. I know the place is less than a year old, but I'd cut my losses on this dolt and his fading fadwear. I still don't know why they had to scuttle Tangerine, but perhaps business had been slowing.

    Also, bring back Fortune Bonus for Pai Gow Poker. I hate having to walk across the street to play it at the Venetian (and wince upon smelling the annoyingly piquant odor of the place).

    Otherwise, I really wouldn't change much.

  10. By goingbust
    12/15/08 at 2:56 p.m.
    Suggest removal

    I like TI too. When I visit Vegas, that is where I stay. The price is right, the location is right, and the place is rather nice considering their reasonable rates. I think it occupies a nice sweet spot between the luxury suite type hotels and the places I'd prefer not stay at. Plus, again, the location really is one of the finest on the strip. My only beef is that I prefered the old show.

  11. By tvegas
    12/15/08 at 3:25 p.m.
    Suggest removal

    Ruffin will know how to run this place ... he doesn't have a MBA

  12. By wavyhorses
    12/15/08 at 4:09 p.m.
    Suggest removal

    What i would like to know is what is he going to do to the ship display? The sirens don't work for me.

  13. By maybevegas
    12/15/08 at 9:49 p.m.
    Suggest removal

    He paid $775 million for over 100 acres

    ?? That 100 acres includes the Mirage and adjacent land. He'll get 50 acres, if that, but the Mirage will sell next. There's no sense in having one property at the north end if two didn't make sense...

  14. By durazzo
    12/15/08 at 11:58 p.m.
    Suggest removal

    Good going Phil!
    Quite a bargain and its going to a seasoned veteran with real hands on experience and common sense. If anyone can overhaul the present day show and bring back some fun, it'll be Mr. Ruffin. And while he's at it, force Canter's to improve their bread quality. Nobody wants to see their sandwich crumble as they're trying to eat it.

  15. By spartacus84
    12/16/08 at 8:50 p.m.
    Suggest removal

    I stayed at T.I. and was pleasantly surprised. However, I did prefer the hokey pirate battle over the piercing shrill of the lame sirens. T.I. offers location and value. Keep it going...

  16. By KellieM
    12/29/08 at 8:44 p.m.
    Suggest removal

    So excited, as a long time employee of Ruffin, I am thrilled he is investing in Vegas again.

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