Philadelphia developer Paul Blatstein says he controls the leases on the Pier Shops at Caesars mall in Atlantic City and was prepared to announce plans for a major refurbishment and change of direction for the property.
But a little problem popped up. Caesars Entertainment says they still own the mall and Blatstein has no right to be there.
Kevin Ortzman, president of Caesars and Bally’s Atlantic City, has accused Blatstein and his company, Tower Investments LLC, of operating “illegally as trespassers” on the Pier Shops property, according to a document filed in Atlantic County Superior Court and obtained by the Press of Atlantic City.
Ortzman says Tower Investments has “no right to occupy, or assert dominion or control over the property.”
According to the Press, the filing traces control of the Pier’s lease from Caesars to a second company, Pier Developers, Inc., and eventually to a third, Delaware-based entity. Caesars says Blatstein took over control of the lease from the third company illegally and without Caesars’ consent.
It also charges that Tower Investments have made no payments to Caesars “related to their use, occupancy and control of the property.”
Ortzman also says in the filing that that during a Feb. 10 meeting with Blatstein, the developer “made clear his intentions concerning his illegal use and occupancy of the property.”
Ortzman writes that Blatstein told him, “you can’t win and I can’t lose,” adding that “I’ll drag this out in court and suck all of the money dry from the Pier and you’ll be left with nothing,” according to the Press report.
Blatstein denied Caesars account of the meeting.
Blatstein has said he wants to transform the pier into a destination and introduce new non-gambling entertainment venues. A press conference to detail his plans was scheduled for last week, but was abruptly cancelled after the dispute with Caesars came to light.
Still, Blatstein says he expects to eventually refurbish the mall.
“As in any complex business transaction, complications always arise, and this is no exception,” he told the Press. “My commitment to Atlantic City and its renaissance is unwavering, and I fully expect to be an integral part of that rebirth.”
He also said he has been working with Caesars and was unaware of their objections until the brief was filed.
Blatstein paid $2.7 million last year for the lease for the struggling mall. That deal closed Nov. 17, according to Blatstein’s court response.
“He came down as a savior,” Blatstein attorney Stephen Hankin told the website Philly.com. “He’s getting slapped in the face by a casino licensee.”
Caesars is seeking back rents and taxes from the shops at the mall, which has struggled financially for several years.
Blatstein now says he is worried that Caesars—which has copies of his proposed blue prints for the property—will now try to steal the design.
“Caesars’ conduct gives me deep concern that it will attempt to use my plans, ideas, and drawings for its own purposes,” Blatstein said. “I did not give it any consent or authorization to do so.”
Blatstein also told the Press that he has already invested hundreds of thousands of dollars into planning and property improvements, while his staffers have spent thousands of hours on the property, including business recruitment trips around the country. Blatstein has already begun changing the mall including removing an elaborate water show to create more space.
Caesars claims it owns the land, that it is owed about $1 million in annual rent, and that it never approved Blatstein’s taking over the Pier Shops’ lease. They are asking the court to evict Tower investments.
Meanwhile, several tenants of the mall released statements supporting Blatstein and charging that Caesars has mismanaged the mall and blocked several attempted purchases by buyers in the past.
