ATLANTIC CITY, N.J. (AP) — Philadelphia developer Bart Blatstein said Tuesday that he and billionaire investor Carl Icahn have resolved a legal restriction allowing the former Showboat casino to continue to operate as a non-casino hotel.
Blatstein bought the former Atlantic City casino and reopened it this year as a non-gambling hotel. He told The Associated Press that Icahn, who owns the Trump Taj Mahal casino next door, agreed to only "a minor consideration" that does not involve payment in return for resolving the claim.
At issue was a 1988 legal covenant requiring that the Showboat not be used for anything other than a casino. That document scuttled Stockton University's attempt to turn the casino into a satellite campus after buying it without getting the restriction lifted.
The university then sold the casino to Blatstein, who is mulling plans unlikely to include casino gambling.
"I have a nice working relationship with Carl, and he is interested in doing the right thing for Atlantic City," Blatstein said. "No money changed hands, and it was a pleasure dealing with him."
A spokesman for Icahn confirmed the agreement but declined to comment further.
The covenant among the Showboat, the Taj Mahal and Resorts requires that the Showboat not be operated as anything other than a first-class casino hotel. Blatstein said no additional permission from Resorts is required to drop the covenant, saying the Taj Mahal was able to exercise authority on behalf of Resorts. Resorts did not immediately respond to a request for comment.
A deed restriction placed on the Showboat property by former owner Caesars Entertainment when it shut the casino down in August 2014 remains in place, but that should not pose a problem as long as Blatstein does not try to reopen a casino there. The restriction runs for 10 years, prohibiting it from being used as a casino during that time, Blatstein said.
The Showboat was among four of Atlantic City's 12 casinos to close in 2014 amid increased competition from casinos in neighboring states; a fifth, the Trump Taj Mahal, is scheduled to close next week.
Stockton University bought the Showboat from Caesars Entertainment for $18 million in December 2014, hoping to convert it into a satellite campus. But it did not resolve the 1988 covenant, and Trump Entertainment Resorts, which owned the Taj Mahal at the time, would not waive it.
Trump Entertainment said it feared underage college students trying to sneak into its casino, exposing it to potentially costly fines.
Stockton, its satellite campus plans thwarted, then tried to sell the property to Florida developer Glenn Straub, who also owns the former Revel casino. But that deal also fell through, and Stockton sold it to Blatstein in January for $23 million.
Blatstein said the deal with Icahn "unlocks real value now."
"It's a wonderful property in a transitioning town," he said.
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