Atlantic City Hotel Values Questioned

The sale price for an Atlantic City hotel, combined with a study from a local union, has raised questions about what Atlantic City casinos are really worth. The previously undisclosed price for Atlantic City’s Claridge Hotel (l.) was $12.5 million. Atlantic City’s largest casino workers union issued a report on the city’s Revel casino hotel saying it is worth $25 million to $73 million.

What’s the value of individual casinos in Atlantic City? Depends on who you ask.

The price for one of Atlantic City’s last remaining old hotels, the Claridge Hotel, was $12.5 million Bally’s Atlantic City has revealed

Bally’s sold the former casino to Florida-based TJM Properties in February, but a price was not revealed at the time.

In a filing with state casino regulators made public last week, Bally’s says TJM Properties paid $12.5 million for the Claridge. TJM plans to operate the 500-room hotel as a stand-alone, non-gambling hotel.

The Claridge opened in 1929 and its guests included Marilyn Monroe, Al Capone, Princess Grace of Monaco, Frank Sinatra, and Nucky Johnson, the real-life political and rackets boss who was the inspiration for HBO’s “Boardwalk Empire” series about prohibition-era Atlantic City, according to the Associated Press.

TJM Properties is a privately held real-estate firm owned by Terence McCarthy of St. Petersburg. TJM Atlantic City plans to position the property with the 1920’s era theming, according to the AP. Plans include new themed restaurants, a lobby bar and entertainment options the company plans to announce soon.

Down the Boardwalk, Atlantic City’s main casino workers’ union continues to insert itself in the potential sale of the Revel casino hotel and has now even weighed in on what the property is worth.

Local 54 of the UNITE-HERE union issued a report examining Revel’s finances through publicly available documents and determined the property is worth between $25 million and $73 million.

The casino cost $2.4 billion to build and has struggled since it opened two years ago. The casino has already filed for bankruptcy once.

According to the Associated Press, the union says casinos are normally valued by calculating its earnings before interest, taxes, depreciation and other costs. But Local 54 projects that Revel will not be profitable until 2024.

Thus, the union based its estimate on the value of its land and its hotel rooms.

Based on the recent sales of Atlantic City casinos, the union says casino land in Atlantic City is worth between $1.25 million and $2.71 million per acre and hotel rooms are valued at between $28,925 and $52,198 apiece.

Local 54 has been fighting to protect workers’ jobs at the casino should it be sold. Revel officials have said they are considering either selling the property, or entering a second bankruptcy.

Earlier this month, Revel President Scot Kreeger told the AP the casino hopes to conclude a deal by the end of this year that could take the form of an outright sale, a strategic alliance with another company or a joint venture among two or more companies to operate it.

He also said he cannot rule out a second Chapter 11 bankruptcy filing.