MGM sells land under Borgata for $73 million

MGM Resorts International announced a deal Tuesday to sell the land underneath the Borgata resort in Atlantic City, but the casino operator is still seeking a buyer for its 50 percent interest in the market's largest hotel-casino.

The company said it reached an agreement to sell 11.3 acres covering four long-term ground leases and their respective underlying real property parcels at the Borgata to Vornado Realty Trust and Geyser Holdings for approximately $73 million.

MGM Resorts and Boyd Gaming Corp. own and operate the Borgata in a 50-50 joint venture. Boyd Gaming is the managing partner of the joint venture.

The land transaction, which was agreed to on July 2, is subject to the approval of New Jersey gaming regulators. The proposed deal was announced Tuesday following completion of an inspection period.

MGM Resorts said in a statement it was hopeful the transaction would close by the end of the year.

MGM Resorts placed its Atlantic City holdings into a trust last spring and is seeking to sell the assets after New Jersey casino authorities said Hong Kong businesswoman Pansy Ho, the company's joint venture partner in the MGM Grand Macau, was unsuitable.

Pansy Ho is the daughter of Macau casino kingpin Stanley Ho. International law enforcement authorities have alleged the 88-year-old billionaire has ties to Chinese organized crime triads.

Analysts have widely speculated on the value of the Borgata. Boyd Gaming, however, has the right of first refusal to purchase MGM Resorts' stake in the hotel-casino.

If the transaction is approved, MGM Resorts would still retain approximately 85 acres of developable land in Atlantic City, of which approximately 70 acres are adjacent to The Borgata on Renaissance Point. The 85 acres were not included in this transaction.

Boyd Gaming Corp. said Monday that revenues and profits at the Borgata declined during the second quarter because of reduced visitation and competition from casinos in neighboring states. Boyd Gaming pre-released earnings on the Borgata because the company is seeking $100 million in financing for a Borgata subsidiary. The financing deal needs approval from New Jersey gaming regulators.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.