Atlantic City lost its fourth casino this year as the Trump Plaza casino called it quits after 30 years on the city’s Boardwalk.
But the closing comes as new life is being planned for another closed casino—the Revel casino which may be bought for $90 million—and also may bring back an old player to the resort.
Donald Trump—whose name was still on the casino despite his having only about a 9 percent interest in Trump Entertainment Resorts—tweeted out some hope that he might make a move to step in and save the property, along with the struggling Trump Taj Mahal casino.
“I left Atlantic City years ago, good timing. Now I may buy back in, at much lower price, to save Plaza & Taj. They were run badly by funds!” Trump said on Twitter.
The post was one of several about the resort Trump has made recently, most of which have criticized the way the resort has been run since he left.
“Did anyone notice that Atlantic City lot its magic after I left years ago,” Trump tweeted.
Trump Entertainment Resorts has filed for bankruptcy saying it has liabilities of between $100 to $500 million. Trump Plaza has been one of the worst performing casinos in the resort for several years and its closure was announced months ago. Trump Entertainment had no luck trying to sell the ageing casino and hotel tower, despite it being available for a fraction of its value.
But Trump Entertainment is now threatening to also close the Trump Taj Mahal unless it can significantly reduce its expenses. The company is seeking major salary concessions from its union workers.
The bankruptcy filing, however, could bring Trump back to the city.
Trump told the Associated Press that he “will be taking a very serious look” at buying back the company and that the decision will come down to price. He said he would then have to determine whether Trump Plaza is “viable” and worth re-opening.
“I got out years ago, the timing was good, but I feel really badly about the people,” Trump told the AP. “I’ll take a good strong look at it.”
Trump also took to Twitter again to fend off criticism that Trump Plaza went into bankruptcy three times when he was more involved with its running.
“For losers and haters, I NEVER went bankrupt,” he tweeted.
Still, many in the city wonder if Trump is serious or just trying to get some publicity.
“Donald is a guy who likes to see his name in the paper,” New Jersey State Senator and former Atlantic City Mayor Jim Whelan told the local Press of Atlantic City. “He’s never been shy about seeking publicity or obtaining publicity. The question is whether this is more publicity for Donald or whether he is serious about coming back to Atlantic City in a real way. We’ll see down the line.”
New Jersey Governor Chris Christie, however, was more welcoming.
“If Donald Trump wants to come in and be a participant again in an active way in Atlantic City I’d welcome him and I think most people in New Jersey would,” Christie said at a news conference. “Listen, anything Donald wants to save, I’m for. If Donald wants to come back and save something, good. I don’t think Atlantic City needs ‘saving,’ but if Donald wants to come and help, we invite everybody.”
1,000 Workers Affected
Meanwhile, another 1,000 Atlantic City casino workers are out of work, bringing the total for the year to about 8,000 workers who have lost their jobs due to casino closings in the city. The Atlantic Club casino closed in January and the Showboat and Revel casinos closed earlier this month.
Trump Plaza had an early morning 6am closing with only a few gamblers and employees on hand to see the casino’s last hour.
“What’s the next step? Where do we go from here?” dealer Ruth Hardwick, a 26-year employee of the casino said to the AP after the casino closed. “It’s happening all over. A lot of us are in the same boat. You think something will come along to save the casino and it didn’t.”
Of the four closed casinos, however, Trump Plaza’s may have been the most expected. The casino was once the showplace of Atlantic City when it opened in 1984 and sits in a prime location in the center of the city’s Boardwalk at the foot of the main entryway into the resort.
But newer and more modern casinos—such as the Borgata Hotel Casino & Spa—have been steadily drawing away its customer base and in recent years the property has not been maintained well since being taken over by its creditors in 2010.
Trump himself has sued to have his name removed from the casinos saying they’ve been managed so badly, they are hurting his brand.
The property was reportedly nearly sold for $20 million last year, but a deal with a California-based firm fell through.
The casino’s net revenue peaked at $347.4 million in 2001, but has been declining steadily and was just $76.3 million in 2013. The casino reported a loss of $5.1 million in 2013.
Signs that the casino was slipping were so obvious that it eventually affected the properties actual outdoor signs, which had several burnt-out letters that were never repaired. Restaurants at the property had been shut down for months.
Taj Mahal May Close
Now attention will turn to the Taj Mahal, which could close November 13. More than 3,100 employees of the casino have been notified of the possible closure.
Bob McDevitt, president of Local 54 of the Unite-HERE—Atlantic City’s largest casino workers union—told the AP that Trump Entertainment wants Taj Mahal workers to give up their health insurance and pension plans in return for keeping the company open. McDevitt said the union won’t agree, but even if it did the cuts would only save about $11 million annually.
In its bankruptcy filing, Trump Entertainment said it pays about $15 million for employee benefits and about $5 million in pension benefits a year. The company also has about $38 million in debt payments each year.
In its bankruptcy filing Trump Entertainment listed assets of no more than $50,000, and liabilities of between $100 million to $500 million.
The company has not paid its quarterly tax payment due last month and says it doesn’t have the cash to make an interest payment to lenders due at the end of the month. The company also says both its online gambling partners—Betfair and Ultimate gaming—are taking steps to end their contracts with Trump Entertainment, according to the AP.
The company is operating with cash used to secure loans from it largest creditor, billionaire Carl Icahn, who owns the Tropicana Casino Resort in the city. The move was approved by the bankruptcy court.
The company owes Icahn about $285.6 million in principal and about $6.6 million in unpaid interest, according to court documents. Icahn has agreed to give the company 30 days to prepare a reorganization plan to be presented to the court.
Icahn’s potential role in the bankruptcy action has led to a lot of speculation, but so far the billionaire has been playing his cards close to the chest.
Still, many analysts wonder if he himself will make a play for the Taj Mahal, since much of Trump Entertainment Resort’s debt is owed to him. Without those debt payments and without Trump Plaza dragging it down, many think the Taj could turn a profit again. Other reports, however, say Icahn has soured on Atlantic City’s future.
Revel Auction Date Set
But that future ma
y be a little brighter with the current move to acquire the closed Revel casino underway. The casino, which closed earlier this month could see a quick turnaround if purchased by Florida-based developer Glenn Straub for $90 million. Straub says the property could be re-opened within weeks.
Straub’s bid through his Polo North Country Club Inc. remains the only qualified bid for the property—which cost $2.4 Billion to build—though reports that other bidders are expressing interest in the property have emerged.
That led to a call from Revel’s trustees to delay a September 24 auction date for the property so more bidders can emerge, but a bankruptcy judge held to the September 24 date.
Straub had threatened to sue if the date had been delayed in a testy hearing before the court. .
Straub’s lawyer told the court that if the acquisition goes through quickly, parts of the property could be open in weeks.
“We don’t want a vacant building when winter comes,” Stuart Moskovitz, Straub’s lawyer told the court.
Straub, 67, then told the Press of Atlantic City during a break in the hearing why he wants to purchase the property.
“I need something to do.” He said. “I need a hobby.”
Straub has said he expects to still have a casino on the property, but will likely hire an outside company to manage it. However, his potential deal with Revel does not require him to have a casino license and Revel itself expects to surrender its casino license.
Chief U.S. Bankruptcy Court Judge Gloria Burns agreed to the Sept. 24 auction—the deadline for bids is September 23—despite a heated argument over a possible extension of the date.
Lawyers for Revel’s creditors and tenants want the date extended do more bidders can emerge. Straub’s bid is referred to as a “stalking horse” bid and covers the bare minimum needed to qualify for the auction. Revel officials had hoped the bid would prompt other interested parties to finalize their bids.
That led to some testy exchanges including a threat by Straub to sue if the auction—set for two weeks after his bid was made public—was delayed. In the end, however, Burns kept the auction date after noting that the auction has been delayed twice before. She also said that reports of bidder interest in the property were welcome.
“This is the first time in this case there seems to be a buzz going on,” she said.
Burns said she would also approve a $3 million payout to Straub’s company if Revel is sold to another party, despite an objection from one Revel trustee over the appropriateness of breakup fees.
Burns was also told that at least one other bidder has contacted the court and stated an intent to bid.
There were also reports that California-based developer Richard Meruelo had bid on the property, but it wasn’t sufficient to be included in the upcoming auction, lawyers for Revel said.
Still, despite the fact that 62 parties had expressed interest in the property, none have made qualified bids and Revel lawyers said they have no other potential buyers for the property so far.
Straub has said he wants to make a major investment in the city, including purchasing other properties in the resort, He has said he is also considering trying to purchase the former Showboat casino—which is also closed—adjacent to the Revel site.
He has not disclosed exactly what he plans for the site.
“We’re going to be doing six, seven more things there,” Straub told the Philadelphia Inquirer. “If it makes money, that’s good. Pat us on the back. If it doesn’t make money, then we close her down just like Miami Arena and we blow it up.”
In 2004, Straub bought the city-owned arena in Miami, but knocked it down four years later after he found it impossible to compete with newer arenas nearby, according to the paper.
A hearing for final approval of the Revel sale is scheduled for Sept. 30.
