Straub Draws a Bead on Two Casinos
- Apr 06, 2015
As of late last week, the Atlantic City buzz was all about a bankruptcy court order approving the sale of the shuttered Revel hotel-casino to Florida developer Glenn Straub for $82 million.
But late Friday, Stockton University announced that it might end up selling the former Showboat casino property, immediately adjacent to the Revel, to Straub for $26 million, according to the Philadelphia Inquirer.
In December, Stockton, which is part of the New Jersey state university system, bought the Showboat complex from Caesars Entertainment for $18 million, with tentative plans to operate one 479-room tower as a hotel and convert the other two towers into 852 rooms of student housing. The casino floor was to be redeveloped into 20 classrooms, 10 lecture halls and various arts facilities, including music, dance and choral instruction rooms; an experimental theater and a dance studio.
(Interestingly, when what was then called Richard Stockton College first opened in 1971, it temporarily held classes in the former Mayflower Hotel in Atlantic City, because its Galloway Township campus was still under construction.)
Unfortunately for the university, however, last week Trump Entertainment Resorts challenged the school’s plans, based on a 1988 covenant that purportedly restricts the property’s use to a casino-hotel, the Inquirer reported. Trump’s Taj Mahal is on the opposite side of the Showboat from the Revel, and the Trump company reportedly doesn’t want underage students right next door to its casino.
In response, Stockton stated that if the dispute with Trump Entertainment Resorts can’t be resolved, it would sell the Showboat to Straub, with an 18-month right of first refusal to lease or buy back the property.
Straub’s larger goal is to undertake the Phoenix Project, an ambitious $500 million revitalization of Atlantic City. The initiative would include a medical complex, independent-living facilities for seniors, two marinas, an equestrian complex, indoor and outdoor water parks, two universities, helicopter and high-speed ferry service to Manhattan, and apparently the redevelopment of much of Bader Field, which closed in 2006.
The purchase of the Revel, assuming it goes through this week, and a possible acquisition of the Showboat would be giant steps forward on the Phoenix Project.