It is official – Carl Icahn is the new owner of the Trump Taj Mahal in Atlantic City. The agreement validating the transfer of ownership to Icahn Enterprises was finalized on February 26 in bankruptcy court. The Taj Mahal will be the second Atlantic City casino to be a subsidiary of Icahn Enterprises; the company also owns the Tropicana.
The Trump Taj Mahal filed for Chapter 11 bankruptcy in September 2014 and was set to close its doors at the end of February 2015. However, Icahn loaned the casino twenty million dollars to keep its doors open.
Icahn acted as a creditor to the Trump Taj Mahal, and his investment firm held over 286 million dollars of the casino’s debt. This gave him leverage when his company began its pursuit of full ownership in bankruptcy court. If Icahn had not decided to buy the Taj Mahal it almost certainly would have closed its doors for good, and that would have made the Taj Mahal the fifth Atlantic City casino closure in one year.
The Atlantic City casino is not in the clear yet
Bad news about the possible future for the Taj Mahal broke on March 2 when Icahn announced that he no longer plans to invest 100 million dollars into casino renovations. The reason he has decided not to renovate the 26-year-old casino is because of a bill that would expand casinos into North Jersey. Icahn believes that the expansion would negatively impact his company’s investments.
Icahn Enterprises announced the change of plans on the Tropicana Casino investor page on Thursday morning.
Icahn, who is Chairman of the board at Icahn Enterprises, made a statement that cited the reasons for the company’s change of plans:
“Atlantic City has great potential to once again become a major tourist destination but only if everyone believes in and takes steps towards that goal.
Unfortunately, it appears that certain political leaders are lining up against Atlantic City because of their personal ambitions. They are FOR gaming in North Jersey, which as everyone knows would destroy thousands of jobs in Atlantic City and South Jersey.”
Icahn continued to elaborate that he felt slightly betrayed by New Jersey politicians whom he claimed made assurances to Atlantic City investors that the casino expansion would never happen.
Icahn ended his statement with a powerful comment about the actions of NJ politicians:
“If these assurances are now broken and Atlantic City is abandoned by politicians in favor of North Jersey gaming, why would anyone ever invest in the great state of New Jersey knowing that the assurances of political leaders in New Jersey mean nothing.”
North Jersey casino expansion and Atlantic City’s survival
It’s not just investor Carl Icahn who is concerned about Atlantic City’s future. On February 29 city residents, business owners, and community leaders protested the casino expansion in Trenton.
The arguments against the expansion from residents of the seaside town largely focus on the potential for increased job losses and additional casino closures.
Proponents of the bill have stated that the casino expansion bill is for the greater good of New Jersey. In past years, the state has lost millions of dollars in revenues due to neighboring states opening casinos. The proponents believe that this is the only way to counteract the massive losses the state has encountered.
Lawmakers have also stressed that part of the bill directly relates to tax dollars being funneled back to Atlantic City for relief.
The bill has already passed both a senate committee and the Assembly Judiciary Committee. Now the bill awaits a public hearing which is scheduled for March 7. After this hearing, the bill will be voted on by both houses and if passed it will be on the November 2016 ballot so the citizens of New Jersey can ultimately decide for themselves.