Legal Battle Halts Stockton Showboat Deal

By LAURA HECKELMANN
On April 8, 2015

Photo courtesy of Wikimedia

Stockton University bought the Showboat Casino, located in Atlantic City, for a total of $18 million in December 2014, in order to expand their school.

However, according to an article by the Philadelphia Inquirer, Trump Entertainment Resorts, owners of the Trump Taj Mahal, opposed the University’s plans. Trump Entertainment plans to use a legal covenant stating that the Showboat’s property is limited to being a first-class casino-hotel.

The company has also said that it does not want to deal with the ramifications of college students potentially drinking underage and gambling in their casino. In a statement Trump Entertainment released, they added that this addition would not be good for their company. It would “create numerous problems we do not want and could damage the Taj's ability to attract customers and regain its financial health,” the statement read.

The problems the University is facing due to this conflict are numerous. The thousands of students who would be living in the dorm section of the potential University building would have to be assigned to different dormitories, jobs are being lost, Stockton could potentially have spent $18 million for nothing and the parking problem Stockton University has already been facing has increased exponentially.

The article went on to explain that despite all of this, President of Stockton Herman Saatkamp stated that the future is “looking positive … the trustees had a very positive discussion, and things went quite well.”

The president also mentioned that he had thought the issue of the legal covenant had been addressed and solved at the time of the purchase; he was under the impression that it would not be an issue. Caesars Casino, the previous owner of the property, does have a section in the purchase agreement detailing the legal covenant, which was formed in 1988.

This is not the first time Stockton University has attempted to establish a campus in Atlantic City, according to Saatkamp, who said, “Stockton tried to establish a full campus in Atlantic City six times during my tenure as president.”

Dennis Levinson, an Atlantic County executive, said in a statement that he believes there could be potential benefits to the college campus coming to the area, as many facets of Atlantic City, including the Steel Pier and the outlet shops nearby, are targeted toward younger people.

“It would be an asset and could play a significant role in the revitalization Atlantic City so badly needs," Levinson said in his statement.

Allegedly, Caesars asked the Taj to waive the covenant in order to permit Stockton to use the property for their purposes. Trump Entertainment released a statement saying that because it is in a state of bankruptcy, they would be unable to waive that right under the covenant without receiving bankruptcy court approval and without receiving the appropriate consideration. The statement ended with Trump Entertainment explaining, “both Caesars and Stockton proceeded with the sale, even though they were aware that we couldn’t waive the casino/hotel covenant as they were asking.”

That being said, Anastasia Sarnese, a junior at Stockton, explained that the root of the problem is actually a man named Carl Icahn, the investor who is taking over Trump Entertainment Resorts. Stockton students, including Sarnese, created a petition about Icahn and the issue in general.

“The petition was made so that everyone who wasn’t involved in getting the Showboat back knew that it wasn’t Trump who had the problem, but a man named Carl Icahn who was trying to take it back,” she said. “We basically wanted to clear up any misconceptions.”

Stockton students are also fighting for the Showboat, and took to the streets of Atlantic City on Friday to voice their dismay at their new campus being potentially taken from them.

“I think it had positive impact,” said Sarnese. “We got national media coverage because of the protest. I think we showed that students are actually interested in getting the Showboat for Stockton.”

lheckelm@ramapo.edu

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