The meltdown of Atlantic City's casino market is providing spectacular deals for potential purchasers to acquire some of the city's biggest entertainment assets for pennies on the dollar.
The Pier Shops at Caesars is the latest Atlantic City attraction to sell at a whopping discount. Philadelphia developer Bart Blatstein says he's buying the multi-level retail and entertainment pier that juts out over the ocean, lured by the steep discount.
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A source with knowledge of the deal, speaking to The Associated Press on condition of anonymity because the person was not authorized to discuss it publicly, puts the price at $2.8 million; the shops cost $200 million to build. U.S. National Bank Association took the property over in an October 2011 foreclosure sale.
"Anytime you can get a property like that for a price like this, it's an incredible opportunity," Blatstein said Monday. "This is what we do: we go into areas that others are running from, and we do what we call transformational developments. I see Atlantic City as an incredible buy."
Blatstein, who is seeking a license to build a casino in Philadelphia, won't reveal any of his plans for the Pier Shops other than to say they do not include gambling.
"My mission is to strengthen the existing tenants and add more," he said.
But he also plans several additional attractions that he says will make the Pier Shops a destination in their own right. He expects to detail his plans at a news conference next month, just before the deal closes.
It comes on the heels of the former Revel Casino Hotel selling for $110 million — 95 percent less than what it cost to build.
Casinos including the Tropicana, Resorts and the Golden Nugget have all sold recently for far less than what it cost to build them. And a Florida developer, TJM Properties, has bought former casinos, including the Claridge and the Atlantic Club, at steep discounts once their gambling component was stripped away. It paid $12.5 million for the Claridge, which it runs as a non-gambling hotel, and $13.5 million for the Atlantic Club, which shut down in January.
Mayor Don Guardian says his city's casino woes — four of the 12 casinos have closed this year — make for spectacular deals for savvy buyers.
The reduced prices, however, are likely to lead to reduced tax revenue for the already cash-strapped city; taxes are based on the assessed market value of property. Atlantic City plans to cut $10 million a year from its budget for the next four years, and lay off some city workers to help deal with a budget gap caused in part by the declining value of the casinos.
Blatstein says the resort has a promising — if somewhat different — future.
"Atlantic City is not going anywhere," said Blatstein, who has a summer home in nearby Margate. "It's been here for 160 years; people love the shore, and they're always looking for reasons to come to Atlantic City."
Wayne Parry can be reached at http://twitter.com/WayneParryAC