Hey, maybe the Atlantic City Council reads this blog. It looks like they’re suddenly saying the same thing I was two weeks ago about Pinnacle. From the AC Press:
In November 2006, the Sands Casino Hotel closed its doors to make way for incoming Pinnacle Entertainment Inc.
At the time, Pinnacle Chairman Dan Lee said the developer would not rush into building its $1.5 billion to $2 billion megaresort, hoping to avoid the construction mistakes and cost overruns plaguing its casino in St. Louis.
But few thought at the end of 2008 the company would still be taking its time.
A slumping U.S. economy and a global credit crisis altered the company's plans to build, but the Sands' demolition has left a huge hole in the city's line of towering Boardwalk casinos, once filled with jobs and business, albeit foundering.
The project's uncertainty, accompanied by a now-stagnant eyesore, is building frustration among city officials, who now are looking for ways to push development.
Councilman Dennis Mason said Sunday he and his colleagues are considering establishing a redevelopment agreement with Pinnacle to impose construction deadlines.
“They had an operating casino running. They buy it, crush it and take all the jobs away. Now they can’t build,” Mason said with frustration. “That thing could still be up and operating.”
Mason acknowledged the resort lacks the authority to force the developer into such an agreement, but hinted there are ways of cementing the deal. He declined to elaborate.
Atlantic City Council may impose construction deadlines in light of Pinnacle delays
That seems ominous–”hinted there are ways of cementing the deal.” Just leave it at that.
Also, there’s a great unintentionally funny quote later in the article, where it’s said that the guy who owns the adult bookstore “never screwed anybody out of anything.” I guess technically he hasn’t, but he’s certainly profited from people screwing each other.
Then another AC Councilman takes a bold swipe at the whole notion of property rights:
“These speculators holding their land strictly for their own personal gain, they should be bowled over,” City Councilman Bruce Ward said.
So getting fair market value for land you own is suddenly verboten? Someone get that guy a copy of Atlas Shrugged.
Dave,
You are assuming that these people would sell for fair market value, whatever that means in ac. I am assuming that they are just orny and don’t want to move their businesses elswhere. Probably both are true. Do you have any information about what these people have been offered for their properties and how do you know its not fair market value?? Maybe they just don’t want to move.
To me, fair market value is whatever the seller and buyer agree on. This often has no relation to the good’s intrinsic worth.
At Lee’s Discount Liquor, for example, the FMV of a bottle of Grey Goose is about $30. At Tryst or the Bank (if you’re getting bottle service), it’s about $450.
If they don’t want to sell, there is no fair market value for the property, since it’s not on the market. Theoretically, though, a combination of incentives–including a favorable retail lease in the forthcoming retail complex–would be enough to persuade most owners of businesses that can’t be fantastically profitable.
I just find it disturbing that one group of business owners who are working rightly to maximize their profits take the moral high group against another group of business owners who are doing exactly the same thing.
For that matter, Gary Stein, over at the Trop, is doing the exact same thing, as well. He threw out several perfectly good offers for the property because he thinks that he can get more money for it–although why a state conservator doesn’t want to take a reasonable offer and get the property out of limbo is beyond me. The Trop is already in eminent domain of a type, and its conservator is still “speculating.”
It’s easy to see that you’d be an idiot to sell for their first offer in AC. Why not play the game?
It’s just over two years since the closing of the Sands in AC. The 2 billion “Mega ” resort is officially abandoned for any number of reasons given (pick one) by management. In hindsight, I have to wonder, did PNK want the Sands in the first place? Or was it all just a poker play with PNK opening the betting with 250 mil. and all the other players folding in the first round.
The original offer called for a 45 day window where the Icahn group could consider and accept a superior offer. If they accepted such an offer PNK would get a 10 mil. break up fee and any amount paid over the original 250 offer. What a deal.
Maybe they thought with all the talk about building a ‘Borgata’ on the boardwalk competitors would come out of the woodwork to stop them. Like Ameristar or Colony Capital whom Dan Lee accused of messing with his Aztar deal, or maybe another competitor. After all, their real goal was a license in Philadelphia County which everyone seems to forget.
Two years later the site is an eyesore. Surrounding business people hate them because of the back door eminent domain move, since rescinded by the local city government.
I doubt PNK will ever be able to recoup the money spent in buying, demolishing and clearing the land. And I’m left wondering if they really wanted it in the first place.