Purchase of Treasure Island Las Vegas hotel for $775 million approved by the Gaming Control Board. The Board didn’t take long to ok the real estate transaction by Phil Ruffin. Final ruling will commence on March 19, 2009 and 11 days later it will close with approval.
Terms for the commercial real estate deal will start with $500 million due to MGM Mirage at closing. Another $100 million will be payable in six months. Finally, $175 million balance due in two years with a 10 percent interest rate.
Ruffin will keep MGM Mirage as operator of the race and sports books for a half a year while the players tracking program changes to Ruffin’s system. He’ll also add hotel operations employees but not change the architectural fascade of Treasure island.
A recent renovation of $84 million had been completed on the 2,885 room hotel casino by MGM Mirage.
A deal was forged three months ago with company Chairman and CEO Jim Murren and major shareholder Kirk Kerkorian.
MGM Mirage needs financial liquidity at this time for the completion of the mega resort Project CityCenter. This week the gaming operator needs to renegotiate repayment terms of $7 billion in loans with its lenders covering some $7 billion or a default could be in its future.
Ruffin looks towards the future with this real estate transaction. Long-term goals will help him recoup his losses for the past year due to decreased tourism and economic condition.