Company says plans do not fit strategy

In a move that surprised no one, Pinnacle Entertainment last week officially announced that it would not build a $2 billion casino resort on the Atlantic City Boardwalk. The company has already suspended planning and development because of a lack of financing but once chairman Dan Lee was dethroned last November, insiders knew the project was dead. All that was needed was the official notification, which came during an earnings call last week.

Acting Chairman John Giovenco, the former head of Hilton Hotels, gave investors the news.

"We hope to sell as soon as a reasonable bid comes in," he said.  "I can't tell you when. Hopefully, sooner than later."

Giovenco admitted there has been little interest in the property. But a Pinnacle spokeswoman said that it may work for a company with a different approach.

"Atlantic City is no longer a good strategic fit for us, given the current economic outlook, the state of the financing markets and the major capital commitment that would be required," said Pauline Yoshihashi. "It's an attractive and well-located site, and may be a better strategic fit for another company."

Pinnacle bought the site of the former Traymore hotel from Harrah's Entertainment in 2005 and then purchased the Sands Casino Hotel, which operated adjacent to that land in 2006. The Sands was later closed and the building imploded with great fanfare in October 2007. But the economic crisis followed shortly on the heels of that implosion and financing evaporated, causing Pinnacle to shelve the project.

City officials are concerned that the vast empty lot in the center of town will reflect badly upon the city and are considering plans to convert it to a parking lot or possibly some kind of entertainment attraction. Mayor Lorenzo Langford has proposed swapping the Boardwalk land for a site in the city's Bader Field section, a former airport slated for redevelopment, but Pinnacle seems intent on exiting the city entirely.

By Staff