A deal between billionaire Carl Icahn and the casino
workers union in Atlantic City fell apart Thursday, putting the future of the
bankrupt Trump Taj Mahal in doubt, union president Bob McDevitt said in a
statement.
The development extends an acrimonious three-month
standoff that has threatened to close the sprawling Agra-themed casino resort,
put 3,000 employees out of work, and turn the casino into the ultimate white
elephant on the Boardwalk.
"We thought that we had come to an agreement with
all parties," McDevitt, head of Unite Here Local 54, said in a statement.
"We signed it, and the Trump CEO signed as well."
But at noon Thursday, McDevitt said, "we were told
that Carl Icahn had gone back on his commitment and would not enter in the
agreement."
Under the tentative deal reached late Wednesday night,
Icahn had given in to union demands, restoring health and pension benefits he
had gone to court to revoke, and giving up on attempts at outsourcing and new
work rules, including increased room cleaning quotas and the elimination of
paid meal breaks.
In return, Unite Here Local 54, had said it would
withdraw an appeal of the federal bankruptcy court ruling that allowed Icahn
and Trump Entertainment to vacate the union contract. The Taj Mahal had been
scheduled to close at 5:59 a.m. Saturday, but a deadline to file final notice
of that passed on Wednesday. It would have become the fifth of Atlantic City's
12 casinos to go out of business this year, joining Atlantic Club, Showboat,
Trump Plaza and the Revel.
"This is what we have been dealing with for some
time now at this property," McDevitt said. "We are disappointed that
Mr. Icahn's whims are going to add to the feelings of uncertainty and
instability that workers have had to live with and have to endure during this
holiday season and beyond.
"We and everybody else thought we could start moving
Atlantic City forward, but it is unfortunate that one person could put the
brakes on all that."
Icahn did not respond to a request for comment.
The 34-year-old casino at 1000 Boardwalk was to pass over
to 78-year-old Icahn, a self-styled billionaire brawler who took over the
Tropicana in 2009, invested his millions, and turned that casino into a
profitable one that attracts roving bands of partying millennials on weekends
and throughout the summer.
Icahn has promised to invest $100 million into the Taj
Mahal to turn the flailing casino around, provided the state provides
sufficient tax relief. The Taj Mahal, once the most profitable casino in Atlantic
City, is still considered an attractive convention hotel with a favorable
location across from the newly renovated Steel Pier, whose owners have opened
pubs and are planning to build a large Observation Wheel modeled after the
London Eye.
The Icahn-Local 54 battle had played out in public in a
series of noisy protests staged by the union and in letters penned by Icahn and
Trump executives pleading with the union to meet their demand to drop the
appeal.
But in the end, the tentative deal was brokered by phone
at the state level, led by Jon Hanson, Gov. Christie's point man on Atlantic
City, and state Senate President Stephen Sweeney (D., Gloucester), who is
ushering through legislation to satisfy the casinos and stabilize the city's
finances.
Robert Griffin, CEO of Trump Entertainment, has said the
bankrupt casino is losing $10 million a month. Icahn also controls the
shuttered Trump Plaza, which is expected to be demolished and repurposed into
an extension of the Tanger Walk Outlets and the soon-to-open Bass Pro Shops.
Griffin's last letter was to Icahn himself, begging for
$30 million to keep the casino alive through the first few months of 2015 while
the union pursued its appeal. Griffin was not expected to stay with the
company.
A financial assistance package for Atlantic City's eight
casinos and for the city's municipal finances is expected to be passed by the
state Legislature as early as Thursday.
It would let casinos make reduced payments in lieu of
taxes for 15 years, help pay down Atlantic City's debt, and prohibit the casino
tax appeals that have undermined city finances. It would also divert casino
reinvestment tax from the Casino Reinvestment Development Authority to the
city's debt.
Source: Philly.com
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