Philadelphia developer Bart Blatstein's heralded entry
into Atlantic City has hit an inconvenient snag: Caesars Atlantic City now
claims he is a "rogue occupier" of the Pier Shops, which he wants to
redevelop.
In an odd series of court filings, Blatstein appears to
have become ensnared in a fight with Kevin Ortzman, president of Caesars
Atlantic City, which owns the pier, and says Blatstein is trespassing until it
says he is not.
Blatstein paid $2.7 million late last year for the right
to assume the lease for the troubled high-end mall that juts out over the
ocean, which he says he wants to transform into an entertainment venue modeled
after places in Nashville; Austin, Texas; and Las Vegas. That deal closed Nov.
17, according to Blatstein's court response, filed Monday.
"He came down as a savior," Blatstein attorney
Stephen Hankin said Monday. "He's getting slapped in the face by a casino
licensee."
Caesars is trying to recoup back rents and taxes from the
mostly failed Pier Shops, which nonetheless still has a popular Apple Store as
well as Buddakan and Continental restaurants.
Blatstein says he now worries that Caesars is going to
steal his big plans, contained in blueprints he left in Ortzman's hands after
discussions that Blatstein said showed no indication that Caesars would object
to his involvement.
The casino company has gone to court to get a judge to
order Blatstein's "ejectment" and bar him from holding any news
conferences about his plans.
(Blatstein canceled one big one planned for this week
about the same time the court papers were filed.)
Ortzman accuses Blatstein of trespassing on the Pier, and
quotes the developer as threatening to "blast" him in the press and
"suck all of the money dry from the Pier." Blatstein denied that and
said the court filing was the first hint he had that Caesars objected to his
taking over the lease.
On Monday, each side brought two lawyers to speak by
speaker phone to Superior Court Judge Raymond Batten, who recused himself
because his daughter works for a law firm that represented Blatstein. Another
judge was assigned and another conference was scheduled for Thursday.
Blatstein attorney Stephen Hankin said Caesars was
violating the state Casino Control Act by interfering with Blatstein's attempt
to enhance the city.
Caesars attorney Russell Lichtenstein said Blatstein was
going around acting like he owned the Pier. "There's this notion that he
somehow bought the Pier, which is false," Lichtenstein said.
On Monday, Blatstein attorney Francis Manning said that
he would advise his client not to reschedule his news conference, but that
"I cannot agree to stand down" on other matters such as negotiating
with prospective tenants at the Pier. Caesars claims Blatstein "has no
right to be there" beyond, presumably, going to the Apple Store himself.
Since Blatstein has said he purchased the Pier Shops as
Tower Investments, he has had signs up in the mall for prospective tenants,
most of which had been removed Monday. Tower has also removed the elaborate
water show in the rear of the pier to open up a three-level space, and was
scheduled to announce big plans, possibly for a new entertainment venue and
other tenants aimed at millennials. His interest in Atlantic City was seen as
one of the few hopeful signs for the beleaguered resort.
Caesars now claims the deal is more complicated than
that: That Caesars owns the land, that it is owed about $1 million in annual
rent, and that it never approved Blatstein's taking over the Pier Shops' lease.
The dispute between Blatstein and Caesars opens another
chapter in the tortured financial history of the $200 million Pier Shops, which
opened in 2006 and, with its mix of high-end stores and restaurants, was
supposed to help Atlantic City compete in a world where it had lost its
monopoly on East Coast gambling.
By late 2009, the Pier Shops had stopped paying on a $135
million loan, and it ended up in foreclosure the next year. Lenders took over
the property and hired Torchlight Loan Services L.L.C. to sell it.
Torchlight put the mall on the market in June, reaching a
deal with Blatstein in October. Blatstein paid $2.7 million for the right to
take over a lease that runs through 2078.
The problem for Blatstein is that Caesars has the right
to approve the transfer of the lease, and is using that leverage to try to recoup
what could be millions in overdue rent.
Source: Philly.com
No comments:
Post a Comment