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ATLANTIC CITY-The ink was barely dry on the closing papers when Colony Capital chairman Tom Barrack presented the Casino Reinvestment Development Authority with a plan that will more than double the room capacity of Resorts International Hotel. Resorts, which dates back to the late 1920s, was the first casino/hotel property when the state legalized the gaming palaces back in the mid-1970s. Its owners simply added a casino to the existing hotel.

Time had passed Resorts by–the property underwent several ownership changes and at least three failed expansion proposals when Colony Capital bought it less than two months ago from Sun International (see earlier stories). The sale price was $140 million, and the expansion just announced will cost almost as much –$125 million. A second expansion phase–costing as much as $100 million–is in the works.

The current proposal is to build a 30-story, 500-room tower adjacent to the original hotel tower. Combined, the two building would have a total of nearly 1,000 rooms and suites. The new art deco tower would replace Resorts’ current North Tower, which has less than 200 rooms that are generally considered to be substandard.

“What’s conducive to the operation of the hotel and casino is doing a better job with what we’ve got,” Barrack told CRDA during his presentation. “To do that, we obviously need more rooms. We think this proposal we’re offering is a tasteful and thoughtful job.”

There could be more on the horizon for Resorts. Conceptual plans are being developed to rebuild the fabled Steeplechase Pier, which suffered a devastating fire in the late 1980s and was torn down about five years ago. What Barrack has in mind is a new pier with 200 hotel suites, a ballroom, swimming pool and retail stores. The projected cost is as much as $100 million.

“We are looking at the long-term master plan for the hotel,” Barrack told the CRDA panel. “We would be foolish not to incorporate the pier into the property – it’s a natural attraction.”

As far as the new hotel tower, Colony Capital is looking to begin work this fall and have it ready by the spring of 2003. It would be part of a wave of new construction in Atlantic City–the $1 billion Borgata casino/hotel is slated for completion around the same time, as is the $225 million expansion of the Tropicana. The Showboat is also said to be looking to expand.

Financing for the expansion is currently being arranged through Merrill Lynch, according to Barrack. CRDA has already okayed a $12.4 million outlay from a $175 million state-sponsored redevelopment fund.

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