The closed Trump Plaza in Atlantic City would not re-emerge as a casino for at least a decade under a restriction placed on it by Trump Entertainment.
Trump officials said the move was made to ensure the company does not have to pay casino-based taxes on the property.
The New Jersey Legislature has passed a bill that would allow Atlantic City casinos to make payments in lieu of taxes for 15 years as part of an Atlantic City rescue plan. The bill has been sent to Governor Chris Christie for either his signature or veto.
The bill applies to any property that was licensed to operate as a casino in 2014 and that does not have a deed restriction.
Trump Plaza closed in September 2014—meaning it was licensed and operated for eight months—and Trump officials said they were concerned they might have to pay taxes on the property under the bill.
“The Plaza could be required to make mandatory payments under the PILOT program notwithstanding the fact that it generates no revenue and its hotel rooms are closed,” the company wrote in a filing with a Delaware bankruptcy court. “The PILOT program applies to casino gaming properties that are ‘not subject to recorded covenants prohibiting casino gaming.’”
The deed restriction has also been filed with Atlantic County.
Trump Entertainment has appealed their 2014 and 2015 property taxes, reportedly in the belief that they will be able to get a better deal than if they were to participate in the PILOT program. Part of the bill blocks casino property tax appeals for the 15 years.
The deed restriction would apply to anyone that might buy the property in the next 10 years, however the deed could be cancelled in the event that the buyer pays a release fee to Trump Entertainment. No comment has been made on the amount.
In another note on Trump Entertainment’s court filing, some wording leaves open the possibility that the company may challenge to Pilot program if approved as being unconstitutional.
”The Debtors (Trump Entertainment Resorts) believe that the PILOT Program’s mandatory participation requirement may present unconstitutional infirmities, and otherwise expressly reserve all rights and defenses with respect to the validity or legality of the PILOT Program.”
Atlantic County Assemblyman James Whelan—a sponsor of the rescue bills—told the Press of Atlantic City that Trump Entertainment was the only casino company that did not weigh in on the idea when the bills were being drafted. Trump Entertainment was involved in a still on-going bankruptcy and chose not to meet with legislators, Whelan said.
Trump Entertainment did not comment on a possible legal challenge.
