The year-long drama that marked Stockton University’s ownership of the former Showboat Casino in Atlantic City came to an end Friday when the university sold the site for $23 million to Showboat Renaissance, LLC.
The sale marks a pivotal step for the future of the city, as Stockton can move forward with plans to develop a new Island Campus on the site of the old Atlantic City High School, and new owner Bart Blatstein takes over Showboat, which has been sitting idle for more than a year.
“This is an incredible day for the university,” president Harvey Kesselman said late Friday afternoon. “The money is in our account.”
He said there were minor details to work out, but the process went smoothly.
“Stockton is closing this chapter in our history, and moving on to exciting plans for the university’s future,” he said. “Tonight will be the first time in a long time that I will get a full night’s sleep.”
Future plans also include new academic buildings on the Galloway campus scheduled to start construction this year. Kesselman said he would also hope to break ground on the Island Campus this spring.
Blatstein called Kesselman and the Stockton board of trustees professional and great to work with.
“They knew what they wanted,” he said by phone. “They had their goals for Stockton going forward.”
Blatstein declined to go into specifics on his plans for the site saying it’s a conversation for a later date.
“Right now I’m just thrilled to have a great, storied property. It’s time to go out and get a nice dinner and a nice glass of wine and toast the future.”
Earlier this week Blatstein said he has been approached with a range of ideas for the building, including a casino, timeshares and offices.
But first he will also have to deal with the issue that killed Stockton’s plans.
Stockton purchased the site for $18 million in December 2014, and has spent at least another $8 million on maintenance, insurance, utilities and staffing. Kesselman said while they are close, their goal is to recoup all funds spent, and other legal avenues are still being explored.
Stockton intended to convert Showboat into a residential Island Campus and privately run hotel. Those plans were thwarted by a 1988 covenant on the site with neighboring Taj Mahal Casino Hotel that required Showboat be used for a first-class casino hotel. Taj Mahal refused to release that covenant, and Caesars Entertainment Operating Corporation, the parent company of Showboat, had placed another deed restriction in November 2014 that prohibited a casino at the site. CEOC declared bankruptcy in January 2015, and Stockton has filed a complaint against them in bankruptcy court.
In March 2015 then Stockton president Herman Saatkamp announced they had reached a stalemate with Taj Mahal and would instead sell the site. It was initially sold to Glenn Straub, owner of Revel. That deal fell through, and Straub sued the university to rewrite or continue the contract.
A judge ruled in favor of Stockton, which allowed the university to find a new buyer. Straub has said he is appealing that decision and wants to collect damages from Stockton under a provision of the contract that was also supposed to let him use excess power from Showboat at the neighboring Revel during Straub’s dispute with the Revel power supplier.
Kesselman said they wanted a buyer who would invest in the city. They chose Blatstein, who already owns The Playground.
“The university is fortunate to have worked with someone with a strong record of successful development and a commitment to Atlantic City, which is important to Stockton,” Kesselman said.
He said Stockton will collaborate with Blatstein in ways that will contribute to the renaissance of Atlantic City. The sales agreement includes partnership opportunities.
The university is currently lining up financial support for the new Island Campus as part of a public-private development by the non-profit Atlantic City Development Corp The site would include a 56,000-square-foot academic building with on-site parking and residential housing for 500 students.
The N.J. Economic Development Authority has approved almost $70 million in tax credits that would support the new campus. The Casino Reinvestment Development Authority (CRDA) is scheduled to vote final approval of $17 million for the proposed project at its Jan. 19 meeting. Stockton would contribute $18 million toward the development.
Kesselman has also begun a “vision tour,” traveling around the country to conferences and to meet with alumni, friends and potential donors. He said Showboat has generated national publicity for Stockton, and he is happy to be able to report positive news.
(Staff writer Reuben Kramer contributed to this report)