Phil Ruffin’s Treasure Island office gives him the perfect space to plan out the future of his newest property.
To the right of his desk, a layout of the 102-acre Circus Circus complex is scribbled out on a whiteboard, outlining areas that are sure to look different in the coming years: the casino, the 37-acre festival grounds, the 10-acre RV lot. Even at 2 p.m. — 12 hours after he started his workday — Ruffin is still animated as he shows off his plans for the property.
On Tuesday, MGM Resorts International announced it had made an agreement to sell Circus Circus for $825 million to Ruffin, owner of TI and 50 percent of the Trump International in Las Vegas.
In a Wednesday afternoon interview with the Las Vegas Review-Journal, Ruffin shared his thoughts about Circus Circus, noting that while changes are coming to the hotel-casino, he intends to keep its reputation as an affordable, family-friendly destination intact.
‘A real cash cow’
The deal is set to close by the end of the year, with Ruffin’s purchase comprised of $662.5 million in cash and $162.5 million in notes due in 2024.
Ruffin said he had a lot of the cash for the Circus Circus deal after he purchased the 200,000-square-foot Casino Miami late last year. He did not disclose the purchase price of the Florida property, but it had most recently sold in 2014 for $155 million.
After that purchase, “we still had quite a bit of cash left,” Ruffin said, so he started looking for more properties to buy.
“If you can get a land play, along with a cash flow, you’ve got the best of both worlds,” he said. “We didn’t need the money, it’s just what I do. It’s why I get up every day. I enjoy business.”
Ruffin’s answer came via a phone call about two months ago, when representatives from Morgan Stanley notified him that MGM was looking to sell Circus Circus, a property he had been trying to buy for “quite a while.”
The property had been a gold mine for MGM. It made about $65.9 million in net revenue last quarter, and reported a cash flow of $62 million for the 12 months ending June 30.
“It’s been a real cash cow for MGM. Now, hopefully it’ll be a cash cow for us,” he said.
Value in Circus Circus
While some look at Circus Circus and see a run-down property — the casino first opened more than 50 years ago — Ruffin saw a mix of appealing numbers.
There’s the Adventuredome complex, a 5-acre amusement park that Ruffin said attracts about 2.5 million visitors a year with an annual cash flow of about $30 million.
In front of the building, Ruffin said an estimated 78,000 cars drive past every day — potential foot traffic for the site.
But one of the biggest draws is what’s taking place even outside the property.
To the south of Circus Circus is the $4 billion Resorts World, set to open next year. Just across Las Vegas Boulevard is the Drew Las Vegas project. And further east is the Las Vegas Convention Center expansion, which is adding 1.4 million square feet.
“Traffic’s going to increase,” Ruffin said, pointing to the whiteboard drawing. “The north side is coming alive.”
Staff remains, changes contemplated
The Circus Circus property employs 2,300 people. Ruffin said there are no plans to change that.
“We’re very happy with the people they have now, and we hope we have their loyalty when we take over,” he said.
As for renovations, Ruffin said he hasn’t finalized his plans.
“Remember, we just got here, so we want to explore all of our options,” he said. “We were going to take it easy for a while, see how the business transitions.”
His first change will be the Slots of Fun casino, which Ruffin said has suffered a decline in traffic.
He also plans to remodel the property’s 3,767 rooms over time, along with its RV lot, the only one of its kind on the Strip.
“I’m skeptical (the RV lot is) the best use for this property,” he said. “It’ll be something we’ll have to take a serious look at.”
The 37-acre festival grounds may also be transformed under Ruffin, who said he’s considering turning it into an entertainment venue. That acreage alone could be a billion-dollar project, he said.
In addition, he said “a few things” will be done to upgrade the Carnival Midway.
Won’t go too high-end
More details will come out after Ruffin gets a conditional gaming license for the property, something he expects to happen in December. For now, Ruffin said he plans to walk the thin line of upgrading the property while keeping its price point on the low end of the Strip.
“You don’t want to get too high-end because there’s always a need for moderately priced rooms,” he said.
Overall, Ruffin said there’s no rush to renovate as he waits for the rest of the north half of the Strip to develop around him.
“It’ll be better,” he said. “But there’s no rush to do it.”