On Wednesday, Stockton University decided to approve the sale of the Showboat, a former casino of Atlantic City, which was not a quality purchase of the educational institution. The University decided to purchase the closed casino in the hopes of using the facility as a satellite campus. However, legal restrictions complicated the plan and then a sale to Glenn Straub, the owner of the Revel was a no go.
Harvey Kessleman, the President of Stockton, stated that the buyer and the price of sale will not be announced until the expiration of a period of ‘due diligence’ of the buyer. This announcement could happen as early as tonight or tomorrow morning.
The casino was originally purchased by the university for $18 million and hurdles still remain before the closing on November 9th of the new purchase. Kessleman stated the sale is not a done deal. There is still litigation going on and the deal will not be considered completed until closing.
The Showboat casino was one of the casinos in Atlantic City that closed in 2014, with a shutdown date of August 31st. It was just four months later that the Stockton University purchased the property from Caesars Entertainment. The plans were then announced for the University to turn the property into an urban satellite campus.
One area that still has to be configured is the competing deed restrictions. One restriction placed by Caesars Entertainment, prohibits the property from being used as a casino again. However, there is also a restriction from 1988 where the Showboat, Resorts Casino and Trump Taj Mahal require the property to be used for nothing but a casino, so both are conflicting.
The owner of the Taj Mahal, Trump Entertainment Resorts is refusing to waive their rights based on the 1988 covenant. Stockton then tried to sell the property to the Revel owner, Straub, but the deal fell through. Stockton then had to pay as much as $500,000 a month just to upkeep the building they could not use.
With all the problems, Kesselman has anticipated that the court system will untangle the previous contract, which will help the University move forward with the new purchase.