New Jersey’s Stockton University board of trustees have approved 0,000 for a “comprehensive investigation of matters relating to the acquisition and proposed sale of the Showboat Hotel and Casino.”
While the board said it supported the reasons for the school’s $18 million purchase of the property to house an Atlantic City satellite campus for the university, the sale became mired in controversy when it was held up by a neighboring casino.
Trump Taj Mahal invoked a 1988 covenant with then Showboat owner Caesars Entertainment that agreed the property would always be maintained as a casino. Caesars then sold the property to Stockton with its own restriction that the property not be a casino.
The legal complication bogged down the sale and Stockton’s plans for the site.
Stockton officials would not discuss the focus of the investigation in detail, but did tell reporters that concerns recently raised at the state level that the sale was not properly reviewed by the state Comptroller’s Office was part of the reason for the probe.
The university is now trying to sell the property for $26 million to developer Glen Straub, who has also bought the closed Revel casino in the resort. While that possible sale is being worked out, the university is paying about $400,000 a month to maintain the property.
That has led to widespread protest within the university over how the deal was handled and calls for more transparency and faculty representation in such negotiations.
“We want you to know that the board takes full responsibility for what occurred,” Dean Pappas, board chairman said to a large audience at the trustees’ most recent meeting.
He also said the trustees would work to create safeguards to prevent something like this happening again.
Meanwhile, all the interested parties in the dispute were scheduled to meet late last week.
Atlantic City Mayor Donald Guardian called the meeting in hopes of salvaging the deal, which the city hopes will pump life into the north end of the city’s Boardwalk.
“We’re trying to bring everyone to the table to see if the project can be saved, if the college is interested in this location or a different location in the city,” Guardian told the Associated Press. “A university is certainly a very important part of our city.”
But school officials have widely acknowledged that they will probably have to look for another site for an “Island Campus” in the city.
Stockton’s former President Herman Saatkamp resigned last month in the midst of the controversy citing health reasons, but most feel he was forced to leave after the sale went south.
In a related matter, Trump Entertainment—owners of the Taj Mahal—has filed a complaint in Atlantic County Superior Court claiming Stockton improperly withheld or redacted information it has requested regarding the sale of Showboat from Caesars.
According to the complaint, Trump filed an Open Public Records Act asking for all documents and communications relating to the Showboat purchase. The university sought extra time to comply and when it did it provided Trump Entertainment with thousands of electronic documents, but many were heavily redacted.
Stockton officials have not commented on the complaint.
