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Stockton and Straub announce deal for Atlantic City

Stockton and Straub announce deal for Atlantic City

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Developer Glenn Straub has agreed to buy the former Showboat Casino Hotel from Stockton University for $26 million, but the college has 90 days to resolve its legal problem at the site and cancel the deal.

The deal gives the university some breathing room to resolve a 1988 covenant with Trump Taj Mahal Casino Resort that requires the site to be operated as a casino, but also protects the college financially if the legal problems persist, college officials said.

“I believe that this arrangement with Mr. Straub is in the best interests of both Stockton University and the city,” Stockton President Herman Saatkamp said in a statement.

The agreement also allows Stockton to move forward with plans to open the Island Campus to students in the fall, leasing or buying back space at the site from Straub if he takes over the property.

“They’re a customer. They’re a good customer,” Straub said of Stockton.

The announcement came as about 50 Stockton students, community leaders and elected officials rallied for the second day outside the Taj Mahal in support of the Island Campus.

According to statements provided by Stockton and Straub’s Polo North Country Club Inc., the company has put $26 million in escrow on the deal, which college officials said covers the $18 million purchase cost plus ongoing operating costs since the December purchase.

Straub, president and CEO of Polo North, said in a phone interview that the purchase could allow him to connect Revel Casino Hotel to the city’s power grid through Showboat without relying on the Inlet District Energy Center that currently powers Revel. A bankruptcy judge approved Straub’s puchase of Revel on Thursday, and the power plant remains one of the unresolved issues there.

Summer courses planned at the Island Campus have been canceled, and plans for a privately run hotel have also been put on hold, said Sharon Schulman, CEO for external affairs at Stockton. She said there is still a question about whether they can be ready to start classes in the fall.

The deal would also give Straub another piece of what he is calling the “Phoenix Project.”

According to a statement issued by Stockton and Polo North on Friday, that would include an airfield project at Bader Field, an extreme sports complex, two marinas with the capacity to host super yachts, a world-class multipurpose equestrian complex, indoor and outdoor water parks, two universities, a pier project and high-speed ferries and helicopter service connecting Manhattan and Atlantic City. The eight-part plan would bring $500 million in new investments to the Atlantic City area.

“As the name of the project signals, the Phoenix rises out of the ashes to be reborn and will evolve to include a diversified collection of projects,” Straub said in a statement.

City Council is expected to approve a redevelopment plan April 8 that would prohibit a casino at the Showboat site. Stockton was to be named as the redeveloper for the site.

“By all means, we’re going to move forward and keep Showboat as a university,” Council President Frank M. Gilliam said Friday. “We are a big proponent and a big supporter of having the economy diversified.”

Chris Filiciello, chief of staff to Mayor Don Guardian, said, “We all agree that the university is the best use for that property and for Atlantic City.”

The redevelopment plan could void the covenant, but the Taj Mahal could challenge it in court.

Saatkamp said Friday that university officials believe the redevelopment zone plan will resolve the problem.

“I am assured by counsel and others that we are on very firm ground should there be any legal challenges by any casinos regarding the 1988 covenant,” he said. “I have worked closely with Atlantic City Mayor Don Guardian, City Council President Frank Gilliam Jr. and City Council as well as the Casino Reinvestment Development Authority to take the necessary actions that will insulate us from any successful legal challenges.”

If Straub takes ownership of Showboat, he said Friday he would take over the covenant legal fight.

“That’s my obligation,” Straub said Friday. “I’ll take care of it. I’m a big boy.”

He said he believes the Taj would rather work out a deal than have the issue go to court.

The Taj has indicated it will enforce the covenant, but Schulman said Friday they have received no formal legal action.

If Straub took over the site, Stockton would have an 18-month first right to purchase or lease the property for educational purposes, according to the statement released by Saatkamp.

“It is my responsibility as president of this university to make decisions in the best interests of Stockton’s students, faculty and staff,” Saatkamp said. “I do not take that responsibility lightly, and believe I have explored the reasonable avenues available, their risks and their ramifications.”

Students at the Taj Mahal rally Friday handed a petition with about 1,200 signatures and 400 comments to a senior security investigator, who promised it would be delivered to Carl Icahn. The petition called on Trump Entertainment and Icahn to waive the 1988 covenant and allow Stockton to carry out its plans for the Island Campus.

Carl Archut Jr., president of the Stockton Student Senate, said eight students met with Taj CEO Robert Griffin and his attorneys Thursday morning.

Archut described the meeting as unproductive, saying Griffin deflected blame on Saatkamp and suggested Stockton move into the former Trump Plaza.

“He tried making himself seem like he was the better person,” Archut Jr. said. “When we left, we were like, ‘What happened?’”

Taj officials did not respond to requests for comments about the meeting, or other issues about the Showboat, Friday night.

Saatkamp previously has said that they considered other sites in the city and Trump Plaza required too much work to be feasible as a college campus.

Staff Writer Christian Hetrick contributed to this report.

Contact Diane D’Amico:

609-272-7241

DDamico@pressofac.com

@ACPressDamico on Twitter

Contact John V. Santore:

609-272-7251

JSantore@pressofac.com

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