On Monday a judge ruled Stockton University’s contract with Glenn Straub, a Florida developer and new owner of the Revel casino, terminated, enabling the school to find a new buyer.
A deal between Stockton and Glenn Straub’s KK Ventures would have been finalized last month. A day before the $26 million deal was due to go through, Straub sued Stockton alleging the school had not done enough to resolve its legal woes. Superior Court Judge Julio Mendez’s ruling prohibits Straub from disrupting the university’s right to market the property. The April 3, $26 million dollar deal to sell the property to Straub expired July 2. The judge ruled that Straub’s company is entitled to any interest accrued in escrow since April and the purchase price of the property.
In an attempt to reduce competition, the Showboat Hotel and Casino was closed last year even though it was still profitable within the Atlantic City casino market. Then in August of last year Caesars Entertainment sold it to the University of Stockton for $18 million, to be used as a satellite city campus that would expand the campus to the Tourism District.
However, a 1988 land covenant involving Caesars mandates that the property can only be used as a first class casino and hotel, which conflicts with the deed restriction placed on it by Caesars when Stockton bought the property, which states it can be used for anything except a casino. The university did not get the 1988 covenant resolved before buying the Showboat, and Taj Mahal owner Trump Entertainment Resorts refused to waive it, saying they feared that they would be subject to lawsuits and fines due to underage college students sneaking in to gamble and drink.
Legislation that would free the university from the conflicting land covenants was pushed through last month by the Senate’s State Government, Wagering, Tourism and Historic Preservation Committees. Meanwhile Stockton is saddled with a hefty $400,000 a month maintaining the site while it sits dormant. Stockton would be able to sell the property if the proposed legislation nullifies its legal status and clears conflicts over the land.
Straub’s plan to reopen the neighboring Revel casino and make it part of a $500 million Atlantic City redevelopment named the Phoenix Project was stifled this summer due to ongoing litigation with previous business tenants and a power plant.