Bart Blatstein Once Vied with Steve Wynn for a Philadephia-area Casino License.
Stockton University is selling the closed Showboat Casino to Bart Blatstein, a Philadelphia-area developer. The deal, which was approved by the university’s board of regents on Wednesday, is said to be for $22 million. The deal should close by November.
The sell rids Stockton University of a financial albatross which has plagued the school for the past year. A recent investigation into the original purchase of the Showboat recently was published, which blamed the former president of Stockton U., his lead counsel, and Caesars Entertainment for the failed real estate deal. In the end, Stockton University might make a small profit on the casino, which it purchased for $18 million last year. Each month, the college was paying six figures to maintain the empty building.
Showboat Casino’s Closing
The Showboat casino was closed in September 2014. The property’s owner, Caesars Entertainment, owned 4 Atlantic City casinos at the time. Caesars decided to close Showboat to lower payroll and drive customers to their other properties, despite the older casino remaining profitable. The Las Vegas casino company began to shop the Showboat on the real estate market.
Soon enough, rumors spread that Stockton University was interested in buying. Stockton wanted to create an Atlantic City campus and the Showboat would be a perfect fit for the college’s needs–or so it seemed.
1988 Covenant
A 1988 covenant signed between Caesars University and the Trump Taj Mahal assured that the Showboat property could not be used for non-gaming purposes. For a college campus to be placed in the old casino, Trump Taj Mahal would have to sign-off on the purchase.
Stockton University Investigation
What happened next is a matter of controversy and conjecture. A 4-month investigation was commissioned by Stockton University’s board of regents. That investigation was conducted by the Gibbons P.C. law firm, which released its findings in August 2015.
According to those findings, Stockten’s former president, Herman Saatkamp, learned about the 1988 covenant after the board agreed to the purchase, but before the sale closed. Instead of informing the board, Saatkamp kept the matter private. His counsel, Stevan Sandberg of the local Florio Perrucci Steinhardt & Fader law firm, told Saatkamp that amending the covenant would be no problem.
Caesars Might Have Fudged the Truth
Caesars Entertainment, trying to sell the Showboat, appears to have led Sandberg and Saatkamp to believe the Trump Taj Mahal would have no problem with the college campus being installed nearby. At the same time, Sandberg advised the university president it was “no problem”, but he also failed to reveal he was no longer licensed to practice law in New Jersey.
Meanwhile, Trump Taj Mahal had no intention of amending the covenant. Trump Resorts was undergoing the bankruptcy process for the Taj Mahal at the time, while the Trump Plaza was closed. Its new likely owner, Carl Icahn, wanted to maintain the gaming destination atmosphere that only a casino could bring. Also, have a college campus nearby might play havoc with the tax assessment in the area. It made no sense for Carl Icahn to agree to such a deal, no matter how many protests Stockton’s students launched.
Bart Blatstein’s Intentions
Now, it appears that Bart Blatstein is going to purchase the Showboat for $4 million more than Stockton paid for the Showboat last year. Western New Jersey News reported it was uncertain what Mr. Blatstein would do with the property–whether he would open a casino or use it for non-gaming purposes. Knowing what we know about the 1988 covenant, it is pretty obvious that Bart Blatstein will try to open some kind of gaming facility.
Blatstein will need to gain licensing from the New Jersey Division of Gaming Enforcement. If that is approved, the Showboat casino (or whatever new name it will carry) might be back in business.
