Ruffin Times In Las Vegas

MGM Mirage, which is in need of money, has sold Las Vegas’ Treasure Island hotel-casino to a man who once had a significant stake in the city.

The property was sold to billionaire Phil Ruffin Sr., 73, who made a fortune in Vegas. He once owned New Frontier casino, buying the lowly, strike-plagued venue for $165 million (it was built by Steve Wynn for $450 million in 1993) and selling it for $1.24 billion a decade later during the height of a Las Vegas land-buying frenzy, according to the Wall Street Journal.

He had uncanny timing. The New Frontier’s buyer, Elad IDB Las Vegas, imploded the building and later postponed a $5 billion project on the site because of the credit crisis.

All eyes are on Ruffin again. He has returned to Sin City, buying Treasure Island for $775 million – $500 million cash and $275 million in secured notes. He was one of only a handful of potential buyers with the cash on hand to complete the purchase, according to the WSJ.

MGM Mirage unloaded the property while it pours $92 billion into its City Center resort project, which is co-owned by the investment arm of the Dubai government.

MGM Mirage acquired the Treasure Island in 2000 as part of the merger between MGM Grand and Mirage Resorts. It pumped $90 million into remodeling, including the extravagant pirate show out front, which is now the sexier “Sirens of TI” show.

Ruffin’s Las Vegas record is a “lesson in restraint,” according to WSJ. He elected to sell New Frontier rather than raze and rebuild, canceling his own $2.7 billion plan to erect a new gambling palace.

“It wasn’t a difficult decision because the numbers didn’t work,” he told the WSJ. “I’m pretty good at math.”
He laughed after being told Treasure Island was promoting a $49-a-night room offer.

“We know it’s going to be soft for a couple years,” he said. “That’s OK. We won’t have any debt, so we’ll be OK. That’s what gets everyone in trouble – they pile on that debt.”

The deal is expected to close in the second quarter of next year.