Hard Rock to Roll Dice on Trump Taj Mahal, Upping Renovation Budget to $500 Million
Posted on: May 26, 2017, 05:00h.
Last updated on: May 26, 2017, 04:23h.
Hard Rock International doesn’t like what it sees inside the former Trump Taj Mahal in Atlantic City, which the company purchased in March for $50 million.
Billionaire Carl Icahn’s bargain price selloff meant the Hard Rock was acquiring a Boardwalk property for pennies on the dollar, as former casino developer turned US President Donald Trump built the resort for $1.2 billion in 1990.
But upon closer inspection, Hard Rock officials say it’s going to cost a pretty penny to refresh the 2,010-room hotel and gaming space, and rid it of an India-themed décor.
“The amount of money we’re going to have to spend to remove all those minarets and all that purple, Jesus! What were we thinking?” Hard Rock Chairman Jim Allen told the Associated Press this week.
The minarets Allen refers to are the spire and onion-shaped crowns and ornaments found around the Trump Taj Mahal.
Hard Rock Ups Ante
Though the company owned by the Seminole Tribe in Florida got a premiere spot on the Atlantic City Boardwalk for a rock-bottom price, Hard Rock executives say the initial budget of $350 million won’t be nearly enough to trnsform the space into a proper Hard Rock Hotel & Casino. Allen estimated that the project’s cost will increase to at least $500 million.
“It does us no good to put some guitars on the wall and new carpets, and say, ‘I can take five or 10 percent of the business from Resorts or Harrah’s,'” Allen said.
Anyone who traveled to the Taj Mahal before its October closing understands the serious work that lies ahead. A dark gaming floor and outdated eating spaces left the casino feeling musty and unclean.
Atlantic City is in the process of finding a new norm in terms of gaming and hospitality revenue. Five casinos closed since 2014, but the economy is showing signs of recovery and turning the corner to a more prosperous time.
For the first quarter of 2017, the remaining casino licensees generated $816.7 million in revenue from their casinos, hotel rooms, food and beverage services, and entertainment. That represents an 8.6 percent gain on the same period a year earlier.
State of the Union
Atlantic City officials will gladly welcome the increased investment from Hard Rock, and perhaps more importantly, the company’s revelation that it plans to reestablish the property’s relationship with the Local 54 casino workers union.
Previous owner Icahn slashed benefits and flatlined pay after he purchased the Taj Mahal out of bankruptcy in February of 2016. The union eventually went on a strike, but the billionaire didn’t fold to their demands. The standoff led to Icahn closing, and subsequently selling, the property once dubbed the “eighth wonder of the world.”
Allen says he’ll work with Local 54 on a new labor contract.
“There’s going to be no dispute with Local 54,” he said. “We’re going to put people back to work.”
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