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Lawmakers on Thursday considered a bill that would resolve legal restrictions preventing Stockton University selling the former Showboat casino property in Atlantic City.
(Mel Evans/AP Photo)
TRENTON -- An Atlantic City casino operator "strongly opposes" a bill that cleared a state legislative panel on Thursday that aims to help Stockton University sell the former Showboat property.
The legislation would void conflicting legal constraints on the former boardwalk casino, according to the bill's sponsors, and free the southern New Jersey college to pursue building a campus elsewhere in the oceanfront resort town. But Caesars Entertainment, which put a deed restriction on the property before selling it to Showboat, said the bill has "several fatal legal flaws."
"Among other things, the bill would unconstitutionally alter the contractual relationship and rights of the parties," the company's operating unit said in a statement.
A state Senate panel on Thursday approved the bill, though lawmakers expressed frustration with Stockton University for getting itself into this position.
"Somebody made a mistake and now we're being asked to go in and correct that mistake," said state Sen. Peter Barnes (D-Middlesex).
State Sen. Shirley Turner (D-Mercer) called the decision to purchase the former casino a "bonehead idea."
The university has hired a law firm to investigate the purchase, which was made in December under then-President Herman Saatkamp.
Stockton University bought the property for $18 million with plans to open an island campus there.
But those plans were stymied when Trump Taj Mahal said it would enforce a 1988 agreement that requires the property only be used as a casino. A spokeswoman for Trump Entertainment did not respond to a request for comment.
That agreement conflicts with a deed restriction Caesars Entertainment put on the Showboat before selling it to Stockton, which prevents the site from operating as a casino.
The school is now paying $400,000 a month to maintain a property it can't use.
The bill would declare any deed restrictions or land covenants on property owned by public entities within Atlantic City's tourism district violate the public interest, thereby making those restrictions unenforceable, according to its sponsors.
MORE: Indoor water park approved for former A.C. casino site
State Sen. Jim Whelan (D-Atlantic), a sponsor of the bill, said the legislation is needed to free Stockton University from its current quagmire.
"This is just a mess," Whelan said. "This is an attempt to cut the Gordian Knot, to untangle this."
The university reached an agreement to sell Showboat to Florida developer Glenn Straub for $26 million. But Straub sued the school as the closing deadline approached, saying the university needed to resolve the conflicting legal restrictions before he bought the property.
Stockton University's acting president Harvey Kesselman said in an interview earlier this week that the school is "doing everything it can to remedy this matter."
Erin O'Neill may be reached at eoneill@njadvancemedia.com. Follow her on Twitter @LedgerErin. Find NJ.com on Facebook.