Trump Taj Mahal Sale to Hard Rock Finalized
Once the east coast hub of poker in the United States, Atlantic City’s Trump Taj Mahal casino has more closely resembled an unkempt version of the Overlook Hotel the last six months than the bustling gambling center featured in Rounders, following its closure on October 10th. It looks like the Taj will find new life, though, as the sale of the Taj to Hard Rock International was finalized Friday.
The Trump Taj Mahal was President Donald Trump’s in name only, taken over by Trump’s billionaire investor friend and now advisor, Carl Icahn, in February 2016. Icahn agreed to sell to Hard Rock a month ago.
“We are excited to be part of this revitalization of Atlantic City creating thousands of jobs to help local employment,” Jim Allen, chairman of Hard Rock International, said in a statement in March. “We are 100 percent convinced Hard Rock Hotel and Casino Atlantic City will be a success.”
Icahn added his own thoughts:
“We … are extremely happy with our ownership of the Tropicana Casino and Resort, and after considerable analysis and deliberation we determined that we only wanted to own one operating casino property in Atlantic City. A sale of the Taj Mahal therefore represents the optimal outcome for us. We wish Hard Rock and its partners the best of luck with the Taj Mahal.”
A press conference is scheduled Wednesday, during which the Hard Rock is expected to reveal what it plans to do with the property. The company has said it would like to re-open it as a Hard Rock casino in the spring of 2018. Hard Rock has never had a property in Atlantic City, but such a property has been on the company’s wish list. A Hard Rock location on the southern end of the Boardwalk was proposed in 2011, but that never went anywhere.
The company also wanted to build a casino at Meadowlands Racetrack, but in November, New Jersey residents voted down a referendum that would have permitted the construction of two casinos in the northern part of the state. Current state law only permits casinos in Atlantic City.
Donald Trump opened the Taj in 1990, naming it “the eighth wonder of the world.” The self-proclaimed business genius, though, soon ran the business into the ground because of the insane amount of debt his company took on to build and operate it. Multiple bankruptcies later, Icahn’s company, Tropicana Entertainment, took over the Taj Mahal in February of last year.
Icahn, though, was just as bad as Trump was for the Taj. During bankruptcy proceedings, Icahn said he would inject $100 million into the property if he gained concessions from the Unite Here Local 54 union and $175 million in tax breaks from Atlantic City and New Jersey. He received the concessions, as the union members were stripped of their health care and pension benefits, but he never got the tax breaks, so he never contributed the funds.
After Icahn took control of the Taj, the union attempted to negotiate with him and his company to restore their benefits, but he wouldn’t budge. Thus, on July 1st, 2016, about 1,000 members of the union went on strike. In August Tropicana Entertainment’s President and Chief Executive Officer Tony Rodio said that the Taj Mahal would close, blaming the striking workers.
Carl Icahn has been squabbling with Atlantic City and New Jersey ever since. There had been talk that Icahn would attempt to re-open the casino using non-union workers, but less than two weeks after the Taj closed, the state Senate passed a bill to stop him from doing that. The bill stipulated that if a casino was closed after January 1st, 2016, the owner would lose his license for that casino. The House later passed the bill, as well.
In December, the New York Post reported that Icahn was in discussions to sell the casino, but no details were given.
In January, Icahn and Atlantic City Mayor Don Guardian got into a minor spat. After Guardian gave his State of the City address, he answered a reporter’s question about Icahn’s verbal jabs at his city:
It’s the worst of the worst, things like that. Taj Mahal was the crown jewel before the Borgata in Atlantic City. It’s a great facility, but it didn’t get that $100 million face lift that the other properties got in Atlantic City and so you knew it when you walked in there. But it’s a great property; I really hope that Mr. Icahn, if he doesn’t want to build, sells it…and lets someone else come in and do it.
He doesn’t have any faith in the city, I get it, or the state…but don’t let us lose that building and leave it vacant on the Boardwalk. We need the thousands of jobs, we need the taxes, and we need the type of activity that it draws to bring people to Atlantic City.
Icahn had actually said the previous day that the Taj Mahal was not for sale, but after hearing Guardian’s statement, Icahn got snippy, saying that he would make an exception and sell it directly to Guardian for $300 million, as that is how much he had allegedly lost on the casino.