Atlantic City casinos have faced some notorious struggles in recent years, causing at least four to close their doors in 2014.
Now, one of the new owners of a former casino is finding out that things might not be any better even when you remove gambling from the equation.
Stockton University purchased the former Showboat Casino in December with the plan to convert it into a satellite campus while still using some of the facility as a public hotel.
However, that plan might not get off the ground, as Trump Entertainment Resorts says they will not permit a college to be located next to their remaining casino, the Trump Taj Mahal.
Covenant Requires Showboat Remain Casino Hotel
Trump Entertainment made that declaration after notifying both Stockton University and Caesars Entertainment of their decision, something they said they did three months ago.
Back in 1988, Caesars, Trump Entertainment and Resorts all signed on to a covenant that determined that Showboat would always be operated as a casino-resort. Trump Entertainment is now saying that they should receive “appropriate consideration” before it would waive its rights under that agreement, particularly because their company is now in bankruptcy.
In 1988 Showboat, Resorts and Taj all agreed to provide for a cluster of casinos at the north end of the Boardwalk [in order to] create greater customer traffic for all three properties,” Trump Entertainment said in a statement. “To that end, the three agreed that Showboat would always be operated as a first class casino hotel.”
Because of that agreement, Trump Entertainment refused to waive their rights even when Caesars asked them to do so in December. But beyond the fact that it would be against the spirit of the covenant, Trump Entertainment says they also have concerns about what would be placed on the site of the former Showboat.
Concerns Over College Students Near Casinos
“The facts are that our company does not think having a college next door to the Taj is good for our company,” the casino operator said. “Having kids under 21 who will attempt to gain entry to the casino and engage in activities reserved for those only 21 and older would create numerous problems we do not want, and could damage the Taj’s ability to attract customers and regain its financial health. You do not see a college on the Las Vegas strip.”
Stockton officials seemed stunned by the announcement. University president Herman Saatkamp said that he was still hopeful that an agreement could be reached by all parties, but said it would have to happen in a matter of weeks if the building were to be ready for summer session classes. If that can’t be done, then the school may have to sell the casino again.
“We have been stabbed in the heart,” Saatkamp said.
Stockton University could receive help from an unlikely source: Florida developer Glenn Straub, the likely new owner of what was the Revel casino. Straub says that he believes an agreement can still be reached.
“By next Friday there will be a master plan announced that shows how this all gets tied together,” Straub said, suggesting that something could be resolved in the next ten days.