Deal that would have saved school plan refused
A report commissioned by trustees of New Jersey’s Stockton University blames former university President Herman Saatkamp for the fallout from the ill-fated purchase of the former Showboat casino-hotel by the school.
Stockton purchased the shuttered Showboat for $18 million with plans to transform it into an “Island Campus”—a giant hands-on lab for the school’s gaming education programs—but Carl Icahn, who owns the mortgage on the Taj Mahal Casino next door to Showboat, scuttled the deal by insisting he would invoke a 1988 pact between operators at that end of the Atlantic City Boardwalk that neither Resorts, the Taj or Showboat could ever be used as anything but a casino hotel.
At the time, Trump Entertainment Resorts, parent company of the Taj, said the pact would be enforced because of concerns over underage gambling and drinking by college students. “We believe that having a college located next door to the Taj will hurt our business and create numerous problems for us going forward,” the company said in a statement last March. “The scenario of young college students residing full-time in a dormitory a few steps away from the Taj is entirely different from allowing families to dine in our restaurants.”
The new report of the Stockton trustees, however, revealed for the first time that Icahn had a deal on the table with Stockton that he would waive the 1988 pact in exchange for use by Taj Mahal of the Showboat’s 1,331 hotel rooms during the busy summer months. According to the report, Saatkamp ignored the offer, instead proposing a one-time $100,000 settlement for Icahn to waive the pact. Saatkamp, the report said, wanted use of the rooms by Stockton to generate revenue for the college.
According to the report:
“Saatkamp reported that sometime after his call with (Trump Entertainment Resorts CEO Robert) Griffin, he called Icahn, who told him that the 1988 Covenant could possibly be resolved if Stockton gave Trump all 1,331 hotel rooms in the Showboat for the Taj’s use during the summer. Saatkamp told Icahn that this proposal would not work because Stockton needed the rooms to generate income, which was an important aspect of the acquisition.”
The trustees slammed Saatkamp for the decision not to even discuss allowing use of the rooms by the Taj hotel. “Had such discussions taken place,” the report said, “then this matter might very well have been resolved before now, and students might well be populating and getting an education at the Stockton Island Campus as this report is being completed.”
