Developer Bart Blatstein is poised to buy the former
Showboat casino property in Atlantic City from Stockton University, potentially
ending a political and legal mess that has dogged the school for months.
The Philadelphia-based Blatstein is finalizing an
agreement with Stockton for a price greater than the $18 million the school
paid for it last December, a person with knowledge of the deal said.
Details of the agreement remained murky Monday evening,
with Stockton's president and Blatstein both declining comment. NJBIZ.com first
reported Blatstein's involvement Monday afternoon.
Harvey Kesselman, the interim president of the
university, has said he is looking "for the right buyer" for the
property.
Stockton's board of trustees held a special meeting two
weeks ago to discuss multiple purchase proposals for the Showboat property,
following a New Jersey judge's ruling that the university was free to market
and sell the site.
Blatstein's purchase could end a long roller-coaster ride
for Stockton, which bought the property from Caesars Entertainment with the
goal of turning it into a residential "Island Campus" in Atlantic
City for thousands of students.
The move would have allowed for a major expansion of the
university, whose main campus in Galloway is surrounded by the ecologically
sensitive Pinelands. Amid steadily growing enrollment each year, Stockton has
pushed into Atlantic City and other Shore towns.
Stockton's president at the time, Herman Saatkamp, trumpeted
the move. So did local and state officials, who said it would help diversify
the region's ailing, casino- and tourism-based economy.
But months after the deal was signed - as Stockton was
registering students for summer classes in the Island Campus - Saatkamp
announced that the university was being blocked by the parent company of the
Trump Taj Mahal, which is next door to the Showboat property.
"You do not see a college on the Las Vegas
Strip," Trump Entertainment Resorts said in a news release, saying it did
not want to deal with underage college students trying to gamble.
The company made it clear it would invoke a 1988 legal
covenant to block the opening of the Stockton satellite. The 1988 agreement,
involving Trump and Caesars, said the Showboat property can only be used as a
casino and hotel.
Some lawmakers and faculty members began to criticize the
deal - and what they described as a lack of due diligence and transparency.
How, they asked, could Stockton have bought Showboat, knowing about the 1988
agreement?
More questions and criticism ensued when it was
discovered that Caesars had itself placed a competing deed restriction on the
former Showboat property: The site can be used for anything except a casino.
And Caesars, which had guaranteed to protect Stockton
financially in the event of the 1988 covenant's being used, also declared
bankruptcy, adding to the legal tangle surrounding the property.
Saatkamp stepped down as president in April, taking a
medical leave of absence and announcing his resignation effective Aug. 31.
Kesselman, then Stockton's provost, became acting - and is now interim -
president.
Before leaving, Saatkamp announced that Stockton had
entered an agreement with Florida developer Glenn Straub to sell him Showboat
for $26 million - an amount reflecting the costs of upkeep the university had
accrued.
The agreement gave Stockton three months before closing,
with an escape clause saying the university could leave the deal if it resolved
its legal issues.
It didn't.
Instead, Straub, who bought the Revel casino, sued the
university after 90 days, saying Stockton had not done its part to clear the
property for his purchase.
Superior Court Judge Julio L. Mendez ruled last month
that the sale deal was no longer valid, dismissing Straub's complaint.
That ruling freed Stockton to find a new buyer, and Kesselman
said immediately that the university had multiple "interested
buyers."
One of those was apparently Blatstein, who already has a
presence in Atlantic City. In June he reopened the old Pier Shops at Caesars as
an entertainment, shopping and dining complex, dubbing it the Playground,
though in an apparent stumble several concerts scheduled for the venue were
abruptly canceled last month.
Blatstein, who is known for betting big on projects
others consider risky and unlikely, is credited with sparking a revival in
Northern Liberties, including by developing the Piazza at Schmidts.
Blatstein's purchase of the Showboat would take the site
off Stockton's hands, but it is unclear how he would untangle the property from
the complex legal web it is snared in, including the dueling restrictions on
its use.
Straub's lawyer vowed to appeal Mendez's ruling, saying
the developer was still interested in buying the former casino.
A meeting of the Stockton trustees is scheduled for
Wednesday, followed by a closed-session retreat the next day in the president's
office.
Source: Philly.com
No comments:
Post a Comment