Two local lawmakers are trying to help Stockton University out of its troubled purchase of Atlantic City’s closed Showboat casino with a bill that would lift two conflicting deed restrictions on the property.
The bill—from State Senator James Whelan and State Assemblymen Vince Mazzeo, both democrats serving Atlantic City—would declare any land covenants or deed restrictions on property held by public entities in the Atlantic City Tourism District to violate the public interest. That would make the restrictions void and unenforceable, a news release from the lawmakers said.
The sale of Showboat to the university was blocked when it was revealed that two conflicting deed covenants are on the property. Caesars Entertainment put a deed restriction on the property when it sold the site to Stockton saying it cannot be used as a casino.
Caesars, however, already had a covenant with the neighboring Trump Taj Mahal casino that the Showboat casino would only be operated as a casino—designed to protect a cluster of three casinos at the city’s north end.
“The conflicting land covenants between Trump and Caesars have made it very difficult for Stockton officials to sell the Showboat property,” Whelan said. “This legislation would remove land covenants from the property so that Stockton could sell Showboat and use the proceeds for another location for its Island Campus.”
The university had hoped to turn the Showboat into an “island campus” for the school, but is now trying to sell the property.
The university has been cleared by an Atlantic County Superior Court to seek another buyer for the property. However, even that is complicated since developer Glenn Straub—who previously agreed to buy the casino, but was blocked by the conflicting covenants—has also filed suit seeking to hold the university to its sale to him for $26 million. The university feels that offer has expired.
Straub’s complaint against Stockton claims the university has not done all it could to deal with deed restrictions on the site.
“Trump and Caesars’ restrictive and counterproductive deed restrictions on the Showboat have made it nearly impossible to sell the property,” aid Mazzeo said. “Building Stockton’s Island Campus is a priority for the City of Atlantic City, and they can’t do it without first selling the Showboat.”
The legislation will be considered by the Senate State Government, Wagering, Tourism & Historic Preservation Committee, of which Senator Whelan is the chair. It will be introduced in the General Assembly at the next quorum, the release said.
In another matter, Stockton was named as a possible tenant—possibly as an Atlantic City campus site—in the proposed Gateway development project across town from the Showboat on Albany Avenue.
The state Casino Reinvestment Development Authority has approved a redevelopment plan for the 14-acre parcel that would include academic uses. The site is also being talked about for a new headquarters for the utility South Jersey Gas. The authority is partially funding the project with $2.5 million in loans.
