RUFFIN REGRETS WRITING THE BIG CHECK
Phil Ruffin, the casino owner who scored a $1 billion jackpot on the eve of the recesson and wrote a check for almost $172 million in taxes, thought it was a good idea at the time.
He showed a reporter on Tuesday a copy of the check, made out on April 15, 2008.
“Let that dispel that rich people don’t pay taxes,” said Ruffin, the 70-something owner of the Treasure Island Hotel and Casino.
In retrospect, he regrets writing the check.
“Well, we just had so much money and so much cash from the sale. We had a billion, 240 million dollars. We had the money and I knew we could do a tax-free exchange and save that but then you just defer the taxes for down the road, so you defer the taxes for your children and that I did not want to do that.
“But looking back I probably made a mistake and I should have done a 1031 (exchange that allows deferred taxes).
If the government wants to “pick up billions of dollars, that’s one loophole they can change. But that 1031 tax-free exchange was put in many, many years ago by real estate people and I don’t know if they can get it out.
“They should,” he said during an interview.
Ruffin hit it big in May 2007 when he sold the 36-acre New Frontier Hotel site for $1.24 billion, at a mind-boggling local record of $34 million an acre.
Buying at the height of a monster real estate boom, the Israeli company, Elad, had plans to build a $5.7 billion version of the famous New York Plaza Hotel.
Ruffin, a low-profile relative newcomer in town, took the huge profit and sat on it for a year before buying Treasure Island for about $750 million.
Asked if he had any other advice for the government, Ruffin said, “I think that they have to be careful about the taxes.”
At some point down the road, in some states, the state tax on top of the 40 percent is going to get up to 50 or 60 percent, he said.
“But the one thing that I would hope that they would do, and I’ve talked to Harry Reid about it, is the death tax went up from 35 percent to 40 percent and that does not thrill me to death because you pay 40 percent when you’re alive and 40 percent when you’re dead, that doesn’t leave much.”
Ruffin said Reid indicated “he’d try to help us get it down but it went up so there you have it. I’m a friend of Harry’s and we support him, but apparently he couldn’t get it done.”
Buying the Treasure Island was “a very good investment” even though 2012 was not quite as good as 2011, he said.
“We had the traffic, but they weren’t spending the money. The fourth quarter just kind of fell off and the room rates are horrible.”
The forecast “looks like we have a lot of conventions coming in and looks like its gonna be perhaps a better year, but its kind of early to tell.”
He added, “money has been loose and you can borrow money. The banks are loaded and you can get all of the money you want but you can’t get it for new construction. That’s difficult, that’s very tight, so we don’t expect any new hotels to be built around here for a while.”
--NORM CLARKE, Vegas Confidential
