On June 28th 2015, it was reported that as a tax saving measure, the former owners of Trump Plaza in Atlantic City would keep it closed for 10 years.
A deed restriction was filed by Trump Entertainment Resorts for the casino that closed September 2014 and this deed means that it cannot be used for the next 10 years as a casino, but it can still be used for other purposes.
This was done so that were able to avoid any penalty that may arise from higher taxes that may come from a bill that Governor Chris Christie could be signing, that would allow casinos to make payments in place of taxes for 15 years. This forms part of Atlantic City’s rescue plan. The bill would apply to the properties that have been licensed as a casino in 2014 and do not have any deed restrictions.
Trump Plaza believes it may be included in the alternate tax program as it operated for 8 and half months in 2014. The deed restriction would keep the former casino out of the alternative taxing scheme.
The company has already appealed their 2014 and 2015 property taxes in the belief that they will be able to get a better deal then if they were to participate in the PILOT program.
Once the PILOT plan is enforced casinos will no longer be able to appeal their property taxes.
The deed restriction will also 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.
Carl Icahn, a billionaire investor is in the process of buying Trump Entertainment out of bankruptcy court and approves of the deed. As part of the bigger picture, fewer casinos in the city would mean less competition for his preferred properties.
There have been analysts and casino executives that have said that the Trump Plaza would be more valuable if the casino was destroyed and made part of a possible expansion of The Walk, which is Atlantic City’s shopping district – or some other non-gaming attraction.
Trump Entertainment is looking to have the bankruptcy judge approve the restriction by the 9th of July.