Saturday, March 21, 2009 | 2 a.m.
- From MGM to Ruffin: Treasure Island changes hands (3-19-2009)
- Board recommends approval of Treasure Island sale (3-4-2009)
- Treasure Island’s buyer talks about the art of the deal (12-28-2008)
- Treasure Island likely a domino standing alone (12-22-2008)
- For strapped casino giant, sale provides sure cash (12-16-2008)
- MGM Mirage to sell Treasure Island (12-15-2008)
Beyond the Sun
Phil Ruffin was a busy man Friday.
The Kansas billionaire took over his newly purchased casino and hotel, Treasure Island, at 3 a.m. Friday, and 12 hours later, the Strip’s newest casino owner was still going strong.
“Look at business today. There’s no sign of a recession here in Treasure Island,” Ruffin said as he walked through his property bustling with visitors on the casino floor Friday afternoon.
“See this bar here?” he said, pointing to a margarita bar with a line of guests waiting for a drink. “This is a million-dollar bar.”
Despite hard times on the Strip, Ruffin took over Treasure Island during a prime weekend in Las Vegas: the start of March Madness.
“We’re at 100 percent occupancy. That’s a really good sign. People are all over the place,” Ruffin said. “Coming in with March Madness is going to be a good time for us.”
Treasure Island officially became Ruffin’s property hours before the financial transaction was complete. The $600 million in-cash transfer from Ruffin to MGM Mirage was set to take place late Thursday before midnight, but the money didn’t change hands until 10 a.m. Friday.
“The banks were closed when I took over,” Ruffin said while laughing. “We had to do some inventory beforehand anyway, but my job was to make sure we had the $600 million to pay them [MGM Mirage].”
There was no grand ceremony to usher in the new owner. With meetings and a flood of interviews, Ruffin said Friday was all business.
“It’s a very busy day today. We’re going through all the payables and receivables and doing all the accounting we need to do and meeting all the heads of the departments,” Ruffin said.
Aside from corporate meetings and accounting, Ruffin said he’s touring his new property and becoming acclimated to his staff.
Friday afternoon when Ruffin took a break from meetings to grab lunch in the employee cafeteria, he was greeted by an applauding staff -- employees that instantly went from being MGM Mirage employees to being a part of Ruffin's staff.
“The employees are really excited. I think it’s going to be just fine for us,” Ruffin said. “Everyone has been very receptive and very friendly. I’m very happy with what we’ve done and I think the employees will be very happy, too.”
Ruffin said Thursday before the changeover there would be no immediate changes in management, but Friday he said he’s got a few hires to make.
“MGM Mirage did a lot of the work in their corporate office but when they pull that away, then we have to replace those people,” Ruffin said.
Over the next few months, Ruffin will work on financing the remaining $175 million he owes MGM Mirage.
MGM Mirage will give Ruffin a $20 million discount on the $775 million price tag if Ruffin pays all cash for the resort.
To get the lower price, Ruffin must pay down $175 million in notes by April 30 on top of $600 million in cash. The notes come due for payment in three years.
Ruffin said financing for the remaining $175 million isn’t set in stone.
“We’re going to have our bank meeting in early April but our financing is coming from MGM Mirage. If our banks don’t want to cooperate, that’s fine. We’ve got three years of financing through MGM. But if we can get a better deal from the banks, that’s what we’ll do. We hope to do that because it will be a much cheaper rate than what we’re paying MGM,” Ruffin said.
MGM Mirage announced in December that Ruffin Acquisition LLC, which Ruffin wholly owns, would purchase Treasure Island.
Ruffin, a Wichita, Kan., businessman, is the former owner of the New Frontier hotel-casino, which closed in July 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 Strip.
Treasure Island has 2,885 rooms, including 220 suites, and a 95,000-square-foot casino. The resort has 18,000 square feet of convention space and hosts Cirque du Soleil's "Mystere."
Treasure Island had net revenue of $87.7 million during the fourth quarter, compared to the $105.5 million it made in the same period of 2007. Earnings after interest, taxes, depreciation and amortization for the fourth quarter of 2008 were $20.3 million, compared to $29.7 million in 2007.
Ruffin is acquiring Treasure Island in one of the most challenging environments the Strip has faced in decades. Over the long run, he said, he believes in the future of Las Vegas.
“Everyone likes to talk bad, talk down about Vegas and my response is ‘Do you have anything for sale?’ because we’ll buy it,” Ruffin said. “I have confidence in this city.”