Bankrupt Monopoly

Trump Taj Mahal to Close in December

It appears that December 12th will mark the end of an era in Atlantic City, as that is the date that Trump Entertainment Resorts has set for the closing of the Trump Taj Mahal Casino Resort. The place “where the sand turns to gold” has been an institution on the Boardwalk for nearly two and a half decades, a hub for east coast poker players. Should the shutdown happen, the Taj will be the fifth Atlantic City to close in 2014; the year began with a dozen casinos in the languishing gambling destination.

The beginning of the end actually started a number of years ago as casinos in neighboring states began drawing customers away from Atlantic City. After all, when there is a quality, resort-style casino suddenly nearby, there is no reason to drive several hours to a city where gambling is really the only thing to do. Residents of Maryland, Pennsylvania, Delaware, and Connecticut have had to trek down to Atlantic City, justifying the trip with, “Well, I can also get some great salt water taffy,” but now they can stay close to home.  Trump Taj Mahal

The official warning shot of the Taj Mahal’s demise was heard in early September, when the New York Post reported that the casino had broken some of its loan covenants and needed to restructure debt to satisfy its creditors. If it was unable to do so, bankruptcy was a legitimate possibility.

Fast forward to last week and, as originally reported by the USA Today, Trump Entertainment has not received the concessions it needed to keep the Taj Mahal open. One of the focal points of the issue is billionaire investor Carl Icahn, who holds the bulk of Trump Entertainment’s debt. He had suggested he could convert $286 million in debt he holds into ownership in the company and then put up $100 million to keep the Taj Mahal operating, but it does not appear that will happen. In exchange, he wanted a couple things in return (aside from the company). First, he and Trump Entertainment requested court authority to cancel collective bargaining agreements with the casino’s main union in order to save money on health care and pension plans. That was actually granted, but the union has appealed and Icahn wants that appeal dropped. Second, Icahn wanted $175 million in tax breaks from New Jersey and Atlantic City; he was not given those.

Needless to say, people are not happy. According to the USA Today, Bob McDevitt, president of Local 54 of the Unite-HERE casino workers union, sees Icahn as just being greedy. “We are all waiting for Mr. Icahn to step up and become part of the solution and stop pointing fingers, threatening and demanding. For once maybe he could do the right thing instead of trying to bully everyone.”

Icahn, for his part, doesn’t understand how he is the enemy when nobody else is willing to put up any money to save the casino.

Last night, hundreds of casino workers marched on the famous Atlantic City Boardwalk to protest the closing of the Taj Mahal. It was not just Taj employees, either; union workers from competing Atlantic City casinos and even people from the same out-of-state casinos that are hurting Atlantic City joined in solidarity.

One protester, Valerie McMorris, who has been a cocktail waitress at the Taj for 24 years, told NJ Advance Media, “It’s been a roller coaster, we’re closing, we’re opening, we’re closing, we’re bankrupt, we’re not bankrupt. I haven’t slept good. I’m concerned about health care for my family.”

Robert McDevitt was there, as well, saying that Icahn could easily keep the casino open. He also argued against Trump Entertainment’s opinion that the union’s health plan is “not sustainable,” saying, “If they ran this casino like we run our health fund, they wouldn’t be closing this casino. Our health fund is run much better than they run the casino.”

As mentioned, the Trump Taj Mahal will be the fifth (FIFTH!) casino to close in Atlantic City this year. The Atlantic Club closed in January and all was well for a while, but then the Showboat closed at the end of August. Its next door neighbor, the Revel, closed just a couple days later. In mid-September, another Trump Property, the Trump Plaza, boarded up its windows. Assuming the Taj closes, there will be seven casinos remaining in Atlantic City as 2015 begins. One glimmer of hope: the Revel was sold for $110 million and the new owner has said it intends to re-open the casino at some point.


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