An Atlantic County Judge has ruled that Stockton University can seek to unload Atlantic City’s Showboat casino to a new buyer.
At the same time, Superior Court Judge Julio Mendez allowed developer Glenn Straub—who had a previous agreement to buy the closed casino—time to show why his deal with Stockton should be upheld.
School officials were pleased with the ruling since the university has reportedly been paying about $16,000 a day to maintain the property while its status was in limbo.
Stockton acting president Harvey Kesselman called the order excellent news for Stockton.
“We can now move forward with a sale of the Showboat,” Kesselman said in a press statement. “This will be in the best interest of the University and our students.”
But Straub also called the ruling a victory since he will be able to make his case on why the school should go through with the sale to him, before it can sell to another buyer.
“They didn’t get what they wanted,” he told the Press of Atlantic City.
Stockton had an agreement to sell Showboat to Straub’s for $26 million, but the deal expired earlier this month. Straub filed a complaint saying the school had not lived up to its responsibilities to work out conflicting deed restrictions on the property.
The school initially purchased the closed casino from Caesars Entertainment for $18 million and planned to turn it into an Atlantic City campus. Caesars placed a deed restriction on the property saying it could not be used as a casino.
That conflicted with a previous covenant that Caesars had with Trump Entertainment—owners of the neighboring Trump Taj Mahal—saying the property had to operate as a casino. Trump Entertainment objected to having a campus adjacent to its casino and invoked the covenant.
That effectively bogged down all deals for the property and left Stockton paying to maintain a property it can’t use. Stockton then tried to sell the property to Straub—who owns the nearby Revel casino site—but the conflicting deed restrictions continued to block the deal.
Straub asked the court to either make the original contract void, or extend it to allow more time for courts to deal with the title issue.
Meanwhile Stockton has filed a lawsuit against Caesars in bankruptcy court over the deed restrictions.
Stockton is also asking the judge to rule that the sales agreement with Straub be terminated and that the school holds title to the property free and clear of Straub’s company KK Ventures.
Mendez has prohibited KK Ventures from interfering with the University’s title to or right to convey the Showboat property. However if Stockton enters into an agreement for a sale, the university must provide notice to KK Ventures so that KK Ventures may move to challenge it, according to the Press.
Straub told the paper that he is still interested in the site and doesn’t just want his money back. The $26 million has been in escrow since April 3.
“There are a lot of things you can do with that property,” he said. “I’m trying to bring jobs and money into Atlantic City.”
