Icahn could reopen Taj without a union
ATLANTIC CITY — Could the recently shuttered Trump Taj Mahal Casino Resort be reopened in a couple of months with a different name and workforce?
Some people think so.
Taj Mahal owner Carl Icahn and representatives of the casino have remained silent on the future of the more than 4.2 million-square-foot property since announcing in August that the resort would close. But some, including state Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, have expressed concerns about the property being closed for a couple of months, then reopening under a different name and without union employees.
“What I don’t want to see him do is shut it down and then reopen it up and fire all the union workers,” Sweeney said. “It’s called union-busting.“
Taj Mahal management did not return calls seeking comment on the future of the property.
The property, once called the “Eighth Wonder of the World” by former owner Donald J. Trump, closed Monday after management accused striking Unite Here Local 54 members of preventing a “path to profitability.”
The road to reopening the facility might not be that difficult for Icahn. The property’s casino license remains in effect and valid until it is surrendered through a Division of Gaming Enforcement order, said state gaming officials. Typically, casino license surrender can take place several months after a property is closed, officials said.
If Icahn decided to reopen with an operation similar in size and scope to the former Taj Mahal, the property would have to hire 2,500 employees.
The aging property is also in dire need of updating. When Icahn took over the casino hotel, he promised more than $100 million in investment, but he has decided to hold off until after the November North Jersey casino vote.
“Shutting down a casino that is profitable for six months is quite a hit,” said Gordon Lafer, a professor of labor at the University of Oregon, adding the casino market in the city has returned to profitability since four casinos closed in 2014.
In 2015, the property generated $15 million a month in gaming revenue, according to the DGE.
Rebranding a property can give it a new image, said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University.
“When you rebrand a property, you are starting from scratch, in a way,” Pandit said. “You are always going to have an issue with some people knowing it by its previous name, but that isn’t always a bad thing, because there is at least some awareness of you existing in the marketplace. One of the challenges with rebranding is that you have to clearly develop and target market segments all over again.”
The success of the casinos in the Marina District would force the next incarnation of the Taj Mahal to focus on nongaming entertainment if it wants to be successful, said Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College.
“With the recent announcement that the Showboat has been released from its need to be a casino property, it would seem that (Bart) Blatstein and, as also announced, (TEN owner Glenn) Straub understand that to be successful at that end of the Boardwalk and in a shrinking gaming market, noncasino entertainment is a must,” Perniciaro said. “The Taj will need to move in that direction. The marina area is too much of a casino gaming magnet to try to challenge them for market share.”
The concern over the property potentially reopening without a union workforce has spurred some lawmakers to work on a bill that would limit Icahn’s options. The proposed bill is in response to concerns that Icahn would “warehouse” the license or reopen the casino with reduced wages for workers.
“Labor disputes happen and usually get resolved one way or another,” Sweeney said. “But casino owners shouldn’t be able to misuse bankruptcy laws and gaming regulations in order to warehouse a license or take money out of the pockets of casino workers and strip them of benefits simply because they refuse to come to a labor agreement with their employees.”
The bill, S-2575, would amend existing law that gives gaming regulators the responsibility to require license holders to abide by certain standards. Sweeney’s bill would update those standards to “prevent the manipulation of bankruptcy law and gaming licensing.” The bill lets the Division of Gaming Enforcement determine what constitutes a “substantial closure” of a casino. It would be retroactive to Jan. 1, 2016, but would not apply to other casino licenses held by the owner, a release about the proposed bill said.
“This bill encourages casino owners to keep their properties open and rebuild Atlantic City rather than keep their license and throw thousands of families to the curb,” Sweeney said.