Published Monday, March 8, 2010 | 10:20 a.m.
Updated Monday, March 8, 2010 | 2:25 p.m.
It took more than two years, nearly $12 million in fees to lawyers and others and a billionaire's bargain-basement bid, but the Tropicana Casino and Resort has been salvaged by its sale to Carl Icahn.
The $200 million deal completed Monday marks the activist investor's return to Atlantic City, the nation's second-largest gambling market, and ends one of the most tortured casino sales in U.S. history.
Icahn bought the casino out of bankruptcy for 80 percent less than what it was expected to fetch before the recession hit.
The relief inside the casino's executive offices was palpable when a lawyer confirmed that the final papers had been signed and money wired to complete the purchase.
"I'm thrilled," said Mark Giannantonio, who will stay president under Icahn's ownership. "I don't think anyone expected it to take 27 months."
In a prepared statement, Icahn acknowledged the challenges facing Atlantic City from slot machines _ and soon, table games _ in Pennsylvania, Delaware and New York.
"There will undoubtedly be tough sledding ahead for Atlantic City, especially in light of the increasing competition from neighboring states," Icahn said. "However, I believe that Atlantic City, with its beautiful beaches, can again become a premier destination resort."
For that to happen, casinos must invest not only in their own resorts but also in events to draw gamblers from competing states, he said.
Last year, the Tropicana, which opened in 1981, took in $356.7 million, ranking it seventh among Atlantic City's 11 casinos.
New Jersey casino regulators stripped the Tropicana's former owners of their casino license in December 2007, citing less than a year of poor performance including nearly 1,000 layoffs that left the gambling hall dirty and understaffed.
Giannantonio said bad publicity that emerged from weeks of licensing hearings before the state Casino Control Commission hurt the Tropicana badly.
"We were like the dead dog on the side of the road, getting ready to get kicked," he said.
Gary Stein, the retired state Supreme Court Justice who state regulators say was paid more than $900,000 to oversee the sale process, said the immediate aftermath of losing its license left the Tropicana in a precarious position.
"The casino was concerned about making payroll," he said.
Things have improved considerably since then, Stein said. In January 2008, the casino had $19 million in cash, aside from "cash cage," or what it used on the casino floor to pay winning bets. Monday morning, that figure had swollen to $58 million.
The Tropicana's work force is hovering around 3,000, roughly what it was at the time it lost its license, Giannantonio said.
The license denial led to nearly two years of false starts and dead-ends in the effort to attract a buyer. When a deal to sell the Tropicana to Baltimore-based Cordish Company fell through, the former owner of the Sands Casino Hotel stepped in as part of a drive to scoop up distressed casino properties at cut-rate prices.
In January, Icahn received regulatory approval to take control of nine Tropicana Entertainment LLC casinos in Nevada, Indiana, Louisiana and Mississippi as they emerged from a separate bankruptcy.
He also bought the unfinished Fontainebleau Las Vegas casino resort on the strip earlier this year.
And last December, Icahn bought the first-lien debt in Trump Entertainment Resorts' three Atlantic City casinos. Now, he and banker Andy Beal are battling a group that includes Donald Trump to become the owners when that company emerges from bankruptcy.
Giannantonio said the casino does not plan a major expansion, preferring to update "areas that look dated and addressing some of our hotel room product."