Granting Carl Icahn $5.6 million from New Jersey’s alternative investment tax fund for the planned demolition of the shuttered Trump Plaza casino resort could be crucial for Atlantic City’s revitalization, according to gaming industry insiders cited by local news outlet the Press of Atlantic City.
People with experience in the field believe that the move might be quite an unpopular one, but equally necessary for future development on Atlantic City’s Boardwalk.
Trump Plaza Hotel and Casino was once part of President Donald Trumps full-of-marvels casino empire. The resort closed doors in September 2014 after three decades of operations. Mr. Trump had already disposed of his Atlantic City interests at the time.
Mr. Icahn’s Icahn Enterprises assumed control over Trump Entertainment Resorts’ properties, both shuttered and operational ones the following year. A second Trump casino – Trump Taj Mahal – closed doors in 2016. The New York billionaire investor was heavily blamed for the closure of that property.
It was announced earlier in 2017 that part of Trump Plaza would be demolished to create new opportunities for Boardwalk development. The demolition is planned to be conducted next year and will cost over $13 million. Mr. Icahn requested permission for part of the demolition cost to be covered by the alternative investment tax the shuttered casino had previously contributed to the state.
Under local casino laws, Atlantic City’s casinos are required to pay a 1.25% tax on their gambling revenue. The money is stored in a special alternative investment tax fund. Proceeds from the fund are usually used for non-gaming improvements at the city’s casino resorts. What is more, under recently adopted takeover regulations, money from the fund is redirected to Atlantic City’s debt.
Hopes for Future Development
Mr. Icahn’s request has recently received a provisional approval from the New Jersey Casino Reinvestment Development Authority. A further hearing on the matter, during which members of the authority will vote on whether to greenlight the move, is yet to be held.
Some members of the agency’s board have already supported Mr. Icahn’s request. Resorts Casino Hotel President and CEO Mark Giannantonio was among the board members who believed that Atlantic City would benefit from the move. If Mr. Icahn’s request receives the necessary approval and Trump Plaza is demolished, room will be opened for potential investment in the city, the casino executive has recently told media.
Others have argued that if Mr. Icahn receives money from the alternative investment tax fund, he should use it to fund non-gaming improvements at his operational properties, including Tropicana Atlantic City.
The New York businessman’s request was heavily criticized by New Jersey Senate President Steve Sweeney, who argued that if someone needs to pay for Trump Plaza’s demolition, that one should be Mr. Icahn himself and not the “hardworking men and women of the region”.
The closure of Trump Plaza and Trump Taj Mahal led to more than 4,000 people losing their jobs. The consequences from the closure of the second property, in particular, drew stream of negativity towards Mr. Icahn for failing to handle the difficult situation the resort was in in a less damaging manner.
Photo Credit: Fortune
Terry Davis holds a degree in Psychology, but it was after his graduation that he found his real passion – writing. Previously, he worked for a local news magazine.