Taj Mahal Offers to Restore Workers’ Benefits; Stay Open

Officials at Atlantic City’s Taj Mahal have offered to restore the health benefits that a court stripped away when it nullified a union contract if the union drops the appeal of the casino. New owner Carl Icahn would then keep the property open and invest another $100 million, saving almost 3,000 jobs in the beleaguered city.

Trump Taj Mahal President Robert Griffin proposed last week to restore health benefits lost by members of the Local 54 culinary union if the union would drop the appeal of a court decision that nullified its contract with the union.

“We have made significant progress in our discussions with representatives of the state and local governments on a package of property tax relief and other incentives, which gives us confidence that we will be able to keep the Taj Mahal open if you accept the following proposal,” Griffin wrote in a letter to union members.

At press time, there had been no response from the union, but the offer marks a dramatic departure from previous tactics of Taj officials and the prospective new owner, billionaire Carl Icahn. Icahn had first insisted on the cancellation of the contract, state aid, and city tax relief, and now it appears he will settle for nothing.

Hundreds of Taj Mahal employees took to the frigid streets of Atlantic City to both decry Icahn—who could step in and keep the casino from closing on December 12 as scheduled—as a heartless union buster, while at the same time asking him to save the casino and their jobs.

Icahn, meanwhile says he can save the casino if the union drops its appeal of a bankruptcy court decision that voided the casino’s union contract—a fight the union isn’t ready to stop.

“It’s real simple. If they pull the appeal, we’ll keep the place open without state aid,” Icahn, told the Press of Atlantic City.

Icahn is the main lender to the bankrupt casino and is owed about $286 million by Trump Entertainment Resorts, the casino’s owner. Under a proposed bankruptcy plan, Icahn would trade much of that debt for ownership of the casino and invest $100 million into the property. However, Icahn wanted union concessions and about $175 million in state aid to make the plan work.

The union concessions were granted when a bankruptcy court judge ruled the casino could void its union contract last month. The casino dropped pension payments in favor of offering a 401K plan and also dropped its healthcare payments to about 1,100 union workers. The casino wants to pay workers a $2,000 stipend to help them seek health insurance through the federal Affordable Care Act. Officials say the moves would save the company about $14.6 million annually. Under the proposed restoration of health benefits, the casino would not bring back the health plan, but also contribute 81 cents per hour worked by an employee to a pension.

Local 54 of Unite here, the city’s largest casino workers union, immediately appealed the ruling.

The casino seemed destined to close anyway, however, because state and city officials have said they will not give the casino state aid or any tax breaks. Trump Entertainment then notified state gaming regulators that the property would close December 12.

But now Icahn says the property could stay open without the state aid.

Union officials, however, did not talk about dropping the appeal during their protest.

Local 54 President Bob McDevitt told the Press that the union is pursuing the appeal “Because the only thing that the bankruptcy judge left us with was our constitutional right to appeal.”

Icahn says the Taj Mahal is losing $10 million a month, yet he is still willing to invest in the property, but said “the company simply can’t be in limbo for three months while the appeal is pending.”

The fight has led to some strong language on both sides.

Trump Entertainment CEO Bob Griffin has even accused the union of using its own health fund for gaining profit in a letter sent to Taj Mahal workers.

“Your union continues to misrepresent the facts,” Griffin wrote. “In a totalitarian state, such as Joseph Stalin’s Russia, a dictator could lie indiscriminately. If he was challenged, the challenger would be exiled or worse. The beauty of America is that false propaganda can be challenged.

“By its own admission, over the past five years the Unite Here health care fund has made $140 million in net income, and has increased the value of its equity to almost $300 million!,” Griffin wrote. “That is obviously money that should belong to the workers, not to the Unite Here health care fund, which is clearly charging amounts above and beyond the cost of health care. It’s despicable that the Union is willing to sacrifice your jobs rather than risking these profits.”

Union officials did not respond to the letter.

In another matter concerning Icahn, it was revealed this week that Icahn has purchased a home near the closed Trump Plaza that was owned by a local widow who bucked years of efforts by casino moguls to acquire it.

The Press, reported that Icahn subsidiary IEH Investments LLC paid $583,000 to acquire the boarding home owned by the family of Vera Coking.

Coking obtained a somewhat notorious fame for refusing to sell the boarding house, even as late Penthouse magazine founder Bob Guccione—who wanted the site for a planned, but never-realized Penthouse casino—and later Donald Trump tried to acquire it.

It was reported that the two moguls couldn’t reach Coking’s asking price and Coking became a sort of local legend for fighting the two moguls. She is said to have turned down a $1 million offer in the 1980s, though her family has denied that.

Demolition of the site is under way, leading to speculation on why Icahn wants the property. Icahn, however, would also gain ownership of Trump Plaza under the proposed bankruptcy deal. The site sits in one of the prime sections of the city at the foot of the Atlantic City Expressway—the main entrance to the resort—adjacent to the Plaza.

The site could be pivotal in a planned expansion of the city’s successful midtown outlet retail development “The Walk” to the Boardwalk.

The home was auctioned off in August, but the buyer’s name was not release. Lawyers for Coking’s family said they were happy to finally end the controversy over the property.