Agreement on licensing clears way for vote on handover of NJ’s first casino to its lenders

Lenders to seek full license for NJ Resorts casino

ATLANTIC CITY, N.J. — The financially strapped Resorts Atlantic City, America’s first casino outside Nevada, moved closer to being taken over by lenders after they agreed to seek a full New Jersey casino license.

A new company formed by the lenders, RAC Atlantic City Holdings LLC, will seek a full one-year license rather than a lower-level license they had wanted to apply for over the summer, according to documents filed with the state Casino Control Commission. RAC will be managed by Atlanta-based TriMont Real Estate Advisors.

The commission had intended to vote on the license Wednesday, but late Friday postponed a vote indefinitely.

The casino stopped paying its mortgage a year ago and had faced a foreclosure threat since January. Its lenders include Wells Fargo on behalf of Credit Suisse First Boston Mortgage Securities Corp.

Resorts has not been making monthly payments on a $10 million loan backed by a $360 million mortgage from Column Financial Inc., the commercial real estate lending arm of Credit Suisse.

But instead of a nasty court battle, both sides agreed over the summer to hand over ownership of the casino to the lenders, while one owner would stay on to run the casino and be paid an unspecified management fee.

If approved by the state casino commission, it would be the first arrangement of its kind in New Jersey’s 31-year history of casino gambling.

Under the proposed arrangement, Colony Capital LLC will give up its interest in the casino to co-owner Nicholas Ribis, who will manage the casino and continue to own the gambling equipment inside it.

Through a spokesman, Ribis declined to comment on the request, as did an attorney for the lenders.

Resorts is the oldest casino in New Jersey and became the first to open outside Las Vegas in 1978.

Like many casinos across the country, it has been battered by the recession. But Resorts also faces the same cutthroat competition from slots parlors in Pennsylvania and New York that is affecting the rest of Atlantic City.

So far this year, its revenues are down 18.1 percent to $151 million, second-worst of Atlantic City’s 11 casinos.