With his pending purchase of Circus Circus, Phil Ruffin has become one of the undeniable ringmasters on the Vegas strip.
Those two properties and Circus Circus total more than 7,000 rooms.
His $825 million pending purchase of Circus Circus, which includes a hotel, casino and amusement park on 102 acres, is part of what Ruffin calls “a double deal.”
In addition to selling that property, MGM Resorts International is selling the Bellagio to Blackstone Real Estate Income Trust for $4.25 billion but will still operate the business under a lease agreement.
“We were just a small part of what they were doing,” Ruffin said.
Still, it’s a significant move for him, particularly because of the approximately 65 empty acres he’ll own next to Circus Circus.
“It’s a land play with cash flow,” Ruffin said. “And oh by the way, we’re the last piece available on the strip.”
Just four years ago, MGM bought a vacant 25 acres of that total 102 acres for $444 million.
“So they got $17.5 million an acre,” Ruffin said.
Ruffin’s deal, which should close before the end of the year, is for about $8 million an acre.
“This is quite the deal,” he said. “It’s going to do real well.”
There is a lot of interest in what he’ll do with that land.
“Our phone’s been ringing off the wall,” Ruffin said Wednesday following the announcement.
“What are you going to do?” he said everyone is asking.
Ruffin was fielding the calls from Wichita. He left Las Vegas at 3:15 a.m. on Wednesday to fly to Wichita and check in on his businesses here.
Between that and taking a call from a local politician seeking his help, Ruffin spent a little time discussing how the deal came about and what his next plans are.
You’ve always been interested in Circus Circus, and then MGM decided to sell. What was your strategy to be the winning bidder?
We thought about making a low-ball bid. A bid that, you know, everybody would normally do, and I said, “No, lets do a preemptive bid, which is more than what anybody else is going to pay, and just knock out the competition.” I did that in Miami when I bought the (Casino Miami).
So how much was your first offer?
Eight twenty five. Just went all out. . . . They didn’t really have an asking (price). It was just that I thought most people would come in around 650, so I came in at 825. . . . So then I get the call from my friend, Jim Murren, who is chairman, and he says, “There are three issues. If we sign a contract and it doesn’t go through, we want a $25 million penalty.” I said, “You got it.”
Because you knew . . .
Yeah, I knew I was going to do the deal. . . . There were a couple of other small things, and we shook hands on the deal. And he went back to his office, I guess, and canceled everybody else. . . . He knows me. I bought the Treasure Island from him. And so he knows what I say I do.
Is there a limit on the number of casinos one person can own?
You can have as many as you can afford.
It was really the land you wanted here, though, right?
That’s the hook. I really wanted the dirt. . . . So the land with positive cash flow is the optimal thing you can have. Now you get to hold the land and let it appreciate, and it always does. . . . Especially in Las Vegas.
Just like when you sold your first Vegas venture, the New Frontier Hotel and Casino, for just over $1.2 billion?
I got $34 million an acre for my old dirt.
But it’s still not redeveloped. Why?
The cost of building is so high now. It’s very hard to build a new . . . casino (and) hotel. It’s about $1.5 million per room counting everything — swimming pool casino, theater. . . . You’ve got to have one hell of a volume to offset that. . . . They tried to build on . . . my old 35 acres. A thousand rooms. It came to $2.2 billion. They had $2 million a room. It didn’t pencil out.
How did you settle on $825 million for Circus Circus?
Roughly 10 times cash flow. . . . It’s got an $80 million-a-year cash flow. . . . So not bad. So roughly I have a 10 percent return on the money already, not counting what else we can do. So that’s basically the deal.
Do you want to build on the property?
I might. I might. . . . There’s a lot we can do. . . . I see this as an entertainment center. . . . There are lots of entertainment companies out there.
You’ve already had one $3 million-a-year offer for just a sliver of that land, which you rejected. Why?
I just want to develop it cautiously. We’re not pressed for time. . . . You have to be very careful you don’t jump because there’s so much opportunity here.
There is one thing you already have in mind, right?
There is something that is going to go on there that I’m not telling anybody yet because I’m not supposed to, but I got something really big that’s going to happen there.
That you’ll do or somebody else?
Me and somebody.
Is it by chance your buddy who happens to live in a white-colored house?
Oh, no, no, no. . . . It’s a very big firm, and we’re just talking. Sometimes you talk and nothing develops.
You’re already planning to get rid of an RV park on the property. Why?
Land’s too expensive for an RV park. On the strip? Are you kidding me? . . . So goodbye RV park.
You’ve previously shared that you’re not much of a golfer, and you don’t have hobbies . . .
I’m going to die at the desk.
So what is it about doing these deals? How do you feel while they’re in the works?
I’m very, very excited. It keeps me alive. All the things that can happen. It’s so interesting. . . . It’s what I do. It’s what I’ve always done. Remember at one time in my life I only had 28 cents. . . . I did it all myself.
What was your first foray into Las Vegas?
“It was in 1997 when the Frontier got on the market. . . . I was getting ready to sell my interest in the Bahamas. . . . I was the largest land owner in the Bahamas for 10 years. . . . I sold that for $147 million — Crystal Palace and Nassau Beach Hotel. I had to have a place for the money. (The Frontier owner) wanted $165 million for her land. . . . It was an aging old property . . . full of asbestos, of course. Tipping over.”
It was a moneymaker, though, yet still troubled with a long strike. How did the Vegas market receive you?
Very well because Frontier at that time had the largest strike in United States history. Six and a half years (of a) union strike. People were afraid to go in, and so I said, “I can’t buy this thing with the strikers. How do we solve it?” . . . Washington was trying to solve it.
So you met the union leader in a room at Caesars. What happened?
We each had our scotch, and within two hours, we cut the deal and got the strikers off the street.
Do you just make people bend to your will or what?
No. . . . It was a win-win. He got what he wanted. I got what I wanted.
So Vegas was very happy with you?
Very happy. I got my license in 30 days, which usually takes a year. They were so happy to have the strikers off the streets. It solved a lot of problems, and I became kind of a hero . . . settling that strike that they thought was unsettleable. You know, I know how to do that . . . negotiate a deal. Nobody would go face-to-face. . . . Everybody was confrontational, and that gets you nowhere.
You rehired all the employees who had been striking. Why?
Anybody who has enough balls to stay out for six and a half years, I want as an employee.
Was it hard to sort of infiltrate the Vegas market?
It was easy for me. . . . We had a lot of hotels anyway. I think we’ve got 16 now or something like that. . . . Hotels didn’t scare me. The casino aspect, nothing to it. . . . Casinos are cash cows.
Do you gamble?
Yeah, I like to play from time to time. Blackjack. That’s about it. I haven’t had time the last year or so to play.
Isn’t your office in a casino?
Yes, but you can’t play in your own casino.
So how often are you back in Wichita?
Sometimes once every three weeks or, if they’ve got a problem here at Harper (Trucks), two weeks, but never two weeks in a row.
Your hand truck business seems so small compared to your other companies. Isn’t it?
It’s a pimple on my butt. That’s about what it is. But I like it. I‘ve owned it since 1981. I know all the people . . . and it’s very successful.
Like, how successful compared to any one of your other businesses?
Not that successful. (Laughter.) It’s OK.
So you have four hotels in Wichita and two million square feet of office space over three large buildings. Any more plans here?
Could be later on. . . . When more city property becomes available, we’re probably a bidder.
Is there something in particular coming up?
So how about your buddy Trump? What do you think of the current state of things for him? How do you think he’s going to fare politically?
I think he’ll win. I think that the Democrats are way off base. It’s just like Sanders and what’s her name, Warren. They want to kill the goose . . . that lays the golden eggs.
What do you mean?
You know, kill all the rich people. And we’re the one that creates jobs. Do you know how many jobs I’ve created over my lifetime? You wouldn’t even guess. . . . Couple hundred thousand.
What about the impeachment inquiry?
It’s not going anywhere. Can’t get past the Senate.
So given everything with Ukraine, we have to ask . . . Your wife, Oleksandra Nikolayenko, is a former Miss Ukraine, right? Any connection there?
Ever been there?
A few times. I haven’t been in a long time.
So a while back you tripped over one of your children’s toy suitcases and broke your hip . . .
Hell, I was in a wheelchair for two months, and it was very hard. Never break your hip. It’s terrible. The pain is great. . . . I’m fine now but, you know, you limp a little.
Not to be insensitive, but it’s been said that older people who break a hip often are dead within six months. You not only aren’t dead but seem to be kicking harder than ever.
(Roars with laughter.) I know. I’m having a very good year. . . . I work all the time.
Do you work out, too?
No, but I used to be a wrestler. . . . A state champion, and so I was always in pretty good shape.
Even though your mother lived to 103, we still have to ask: You haven’t made a secret deal with the devil, have you?
Maybe. . . . I may die tomorrow, but I’m healthy today.