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Casino union fears impact of Wall Street in Atlantic City

ATLANTIC CITY — The casino workers union is concerned the increasing influence hedge funds are exerting over gaming companies could have a disastrous impact on the local market and wants state regulators to step in before it is too late.

Unite Here Local 54, which represents more than one-third of all Atlantic City casino employees, addressed the Casino Control Commission during Wednesday’s public meeting about protecting workers against potentially hostile actions taken by gaming company investors, specifically at Caesars Entertainment Corp. and MGM Resorts International.

MGM declined to comment. Caesars did not respond to a request for comment.

Caesars stock increases after Icahn deal

Carl Icahn has appointed three people to the board of directors for Caesars Entertainment Corp., giving the billionaire hedge-fund manager a significant amount of influence over the gaming and hospitality company’s future.

The union’s concern is that Wall Street firms have recently purchased a significant percentage of shares in both companies, which could result in those investors looking to make a quick profit at the expense of the industry, the Atlantic City market and, by default, the workers.

“If (their) only interest is to squeeze money out of the company and it’s going to hurt the industry here, then I think the commission is uniquely positioned to have a say in it,” Local 54 President Bob McDevitt said after the meeting.

Chairman James Plousis said the commission and the state Division of Gaming Enforcement would “do our due diligence on all these applications as they come forward,” in respect to licensure and qualifications.

McDevitt told the three-member commission that “private equity was a disaster” for Caesars after the 2008 buyout from two Wall Street firms, Apollo Global Management and TPG Capital.

Tropicana sale to Eldorado Resorts complete

Eldorado Resorts completed the acquisition of Tropicana Entertainment on Monday from Icahn Enterprises, which includes operating rights of the casino hotel in Atlantic City.

He noted that employees of the gaming company “witnessed years of cuts to jobs and maintenance” and casinos were closed, namely Showboat, which the company closed in 2014 to protect its other three Atlantic City properties — Caesars Atlantic City, Bally’s Atlantic City and Harrah’s Resort.

Cindy Pemberton, of Hammonton, worked as a restaurant server at Showboat for 27 years until the property was closed. While she now works at Gordon Ramsay Pub & Grill at Caesars, her position was downgraded to food runner and her take-home pay has suffered as a result.

“No one could have thought that a profitable casino (Showboat) would close down in Atlantic City,” she told the commission. “We do not want to repeat the TPG and Apollo years at Caesars. My coworkers and I will not stand by while New York billionaires and millionaires strip our company for their own gain.”

Carl Icahn, the hedge-fund billionaire who once owned several Atlantic City casino properties but now owns only the shell of the former Trump Plaza, purchased 28.5% of Caesars and is the company’s largest shareholder. He appointed three people to the executive board and will have a say in naming the company’s new CEO.

Icahn and Local 54 clashed in 2016 over contract negotiations for workers at the former Trump Taj Mahal Casino Resort. It resulted in a 102-day strike and the eventual closure of the Boardwalk casino property.

McDevitt was asked whether his concerns were related to the union’s history with Icahn, but he rebuffed the suggestion, saying the focus was not the Wall Street tycoon.

Several hedge funds have also recently bought up shares of MGM, which operates Borgata Hotel Casino & Spa, including Russell Investments Group Ltd. and Commonwealth Equity Services LLC. The gaming company has recently explored using robots in place of service bartenders at MGM Springfield in Massachusetts and announced plans to use them at their Las Vegas properties amid calls to cut $100 million in payroll over the next two years.

“We don’t want to go through another five to 10 years of degrading the industry just so a few guys can make some money,” said McDevitt. “No one should have a license to just pull money out of people’s pockets in Atlantic City just because they are in a minority position of owning a casino. They have a responsibility to the city and the state and, by default, the workers.”

McDevitt said in addition to the potential harm hedge fund firms might do by “squeezing” money out of capital improvements and property investments, he was concerned it may “undermine the revival” of Atlantic City.

“So called ‘active investors,’ whether they are hedge funds or private equity, are generally interested in benefiting themselves and other shareholders in the short-term, often without regard to the long-term consequences for the company,” he said. “Consequently, they are a serious threat to the stability and longevity of our industry.”

Miss America not returning to Boardwalk Hall

After nearly 80 years of gowns and crowns the weekend after Labor Day, historic Jim Whelan Boardwalk Hall will no longer be home to the Miss America Competition.

“It’s not going to be in Boardwalk Hall going forward,” Casino Reinvestment Development Authority Executive Director Matt Doherty said Wednesday during an editorial board meeting. “It doesn’t make sense for it to be there. It’s far too expensive to produce there.”

In a statement, the Miss America Organization said it agreed with the CRDA that production costs to hold the annual competition at the hall were too expensive.

“CRDA has told city leaders and MAO it wants to keep the competition in Atlantic City and has been actively helping MAO explore alternative venues,” the MAO said.

Host city still unknown for next Miss America pageant

However, the statement added the MAO is still exploring other cities to host future pageants.

“When the MAO Board of Directors has reviewed all of the proposals, MAO will make a public announcement,” the statement said.

The competition has been held at Boardwalk Hall since 1940, with the exception of eight years when the pageant was held in Las Vegas from 2006 to 2013.

“We are disappointed not to be hosting the pageant this year,” said Boardwalk Hall General Manager Jim Wynkoop. “Miss America is an iconic brand. It has been a privilege to be associated with it for so many years. ... I am sure that I can speak on behalf of the hundreds of people who worked on the Miss America pageant 2.0 last year that we will miss the challenge to do it again next August and September.”

The Miss America pageant would book two weeks at Boardwalk Hall to build the stage pieces and iconic runway, and hold daytime rehearsals, preliminary competitions and the televised final night.

According to the venue’s website, Boardwalk Hall features a 141,000-square-foot main arena with a capacity of 14,770 seats. Last year, the final night of the Miss America Competition drew 5,880 ticketed spectators, including complimentary tickets. The three days of preliminary competitions drew an average of fewer than 2,000 people.

Doherty cited other shows coming to Boardwalk Hall in the next two years that have a broader appeal and bigger draw.

“Celine Dion will sell out 13,000 tickets (at Boardwalk Hall); 13,000 people will not come to watch Miss America,” he said. Dion is scheduled to perform Feb. 22, 2020, at the hall.

Fans hope to see Miss America make it to 100 in Atlantic City

Miss America’s future in Atlantic City came into question after the three-year, $12 million contract between the pageant and the CRDA expired following the 2019 Miss America Competition in September.

“We gave (the MAO) $4.325 million last year to put on a show in a city that’s considered a food desert,” Doherty said. “We cannot afford it at that level of a subsidy. There has to be a private-sector solution to this.”

Doherty said he has been working with MAO Executive Chairwoman Gretchen Carlson and CEO Regina Hopper “to facilitate Miss America staying in Atlantic City. Probably at one of the casinos.”

In December, representatives for eight of the Atlantic City casinos declined to comment as to whether they were partnering with the MAO to host the next two pageants. However, the late Bruce Deifik, former owner of Ocean Resort Casino, said he had discussed with Carlson bringing Miss America to the casino’s Ovation Hall.

As of September, the MAO said it would require a host city or venue to provide $2.5 million to $4.9 million for production costs and more than 4,289 individual room stays for staff, contestants, family and pageant judges during the pageant’s two weeks.

“They have been very open to making changes we have suggested,” said Doherty. “It was mutually agreed upon that (Miss America) wasn’t going to be at Boardwalk Hall.”

Edward Lea / Staff Photographer  

A judge on Wednesday tossed a lawsuit holding up the demolition of the Bayview Inn on Albany Avenue in Atlantic City. Judge Julio Mendez cited ‘significant public safety concerns’ if the motel remains as is. The cost of tearing it down has been estimated at $230,000.

Two vacant motels on Route 40 are hitting the auction block

In the market for a motel? You’re in luck.

Two vacant motels that serve as symbols of blight leading into Atlantic City are going to the auction block next month, a local real estate auctioneer says.

Ventnor-based AC Auction Realty will conduct on-site auctions May 8 for the Bayview Inn, which sits at Atlantic City’s entrance, and the Inn of the Dove in Egg Harbor Township, said real estate broker Robert Salvato. Late last week, large yellow signs promoting the public sales were placed on chain-link fences that surround the motels, which have long harbored crime. During a 2017 drug raid at the Bayview Inn, authorities infamously found an alligator in the pool.

Salvato said the motel owners contacted him to auction the properties. According to real estate records, SomDev Real Estate LLC owns the Bayview on Albany Avenue and Irma Investments LLC owns the Inn of the Dove on the Black Horse Pike.

Inn of the Dove and Bayview Inn going to auction

Owners of the Bayview could not be reached. Representatives for Irma Investments LLC confirmed Wednesday the Inn of the Dove is going to auction but declined to comment further.

Minimum bids have not been set, Salvato said.

The public sales come as the city works to demolish the Bayview, which has visibly deteriorated over the past year. Officials have called the rundown motel an uninviting eyesore, and have said squatters may be living inside the rundown, vacant building.

“The auctions are on site so people can 100 percent see what they’re buying,” said Salvato, whose company is licensed with the state. “I understand (the Bayview) has a demo order. ... We have to make the potential buyer aware of all the issues on the property.”

The Bayview is assessed at $650,000, according to the Atlantic City Tax Assessor’s Office. A $300,000 lien was placed on the property in December. City Licensing and Inspections Director Dale Finch said there’s an order to demolish the building, which has been deemed unsafe for habitation.

Nine miles down the road, the Inn of the Dove is also listed for auction. The property is assessed at $1.1 million, township records show.

Former township Mayor James “Sonny” McCullough said the inn was successful when it first opened, serving as a “cheaters hideaway” complete with hot tubs and “pornographic televisions.” Over the years, he said, it declined in quality.

“The only thing I can tell you is it’s a good location on the Black Horse Pike,” McCullough said. “If somebody buys it for land use, tears it down and puts something better there, that’d probably be the best use.”

Fire officials closed the inn in February 2018, citing a faulty fire alarm system and $8,000 owed in fines and penalties to the township. Twenty residents living there were displaced.

Parts of the inn reopened after the owners rebuilt the fire alarm system, but it closed again late last year.

“Things slowed up over there, and they eventually shut the business down,” said Donald Stauffer, Egg Harbor Township fire official. “It’s been sitting there empty, and they fenced it in to keep people out.”

Both motels have long attracted drug activity and crime.

An Egg Harbor Township man, 26-year-old Jamal Campos, was charged in 2017 with leading a drug ring out of the Bayview after authorities raided the property. He was sentenced to 20 years in February.

The Inn of the Dove also harbored illegal activity. Before closing, Egg Harbor Township police charged two people in November 2017 with drug offenses after seizing heroin, cocaine and cash from their motel rooms.

The Casino Reinvestment Development Authority has agreed to fund the Bayview’s demolition, and a lawsuit holding up its demolition was tossed Wednesday.

Deep Blue Development, a group interested in buying the property last year, recently sued the city, contending the lien placed on the motel was preventing the firm from redeveloping the land and requested the demolition be paused. An attorney for Deep Blue Development did not respond to requests for comment.

Atlantic County Superior Judge Julio Mendez denied the firm’s request, clearing the way for demolition. The cost of tearing it down was estimated at about $230,000.

In his denial, Mendez gave a green light to the demolition, citing “significant public safety concerns” if it continues to stay as is.

“Now we will begin to put the gears in motion to have it demolished,” Finch said after the decision was made. “We are moving forward.”

Craig Matthews / Staff Photographer  

Signs advertising a May 8 auction hang from the chain-link fences surrounding both the Inn of the Dove, above, in Egg Harbor Township, and the Bayview Inn in Atlantic City.

Convicted ex-Pleasantville BOE members got new government jobs, state says

TRENTON — Former Pleasantville Board of Education members Maurice “Pete” Callaway and Jayson Adams are among those found to have improperly received public jobs after being convicted of federal crimes, according to the state.

Callaway and Adams pleaded guilty in a 2007 bribes-for-government-contracts scheme, served their time and were released from prison. They were supposed to be barred for life from getting public jobs, under state law, since they committed their crimes while doing their work as public officials.

Attorney General Gurbir Grewal’s office provided its findings in response to a records request by The Associated Press.

Grewal began his review after it became public that Democratic Gov. Phil Murphy’s administration hired a convicted former Passaic councilman to work in the state Department of Education.

Since then, the Attorney General’s Office has identified at least eight additional cases in which proper documents were not submitted for individuals convicted of federal offenses, said Grewal spokeswoman Sharon Lauchaire in a statement. “Additional cases may be forthcoming,” she said.

The eight included Callaway and Adams.

Adams pleaded guilty in 2007 to accepting $62,500 in bribes for steering school board contracts, and Callaway pleaded guilty to accepting $13,000 in a case in which 10 others — including the president of the school board — were also charged.

Callaway pleaded guilty to attempted extortion under color of official right. Adams pleaded guilty to the same charge, as well as obstruction of interstate commerce under color of official right.

State pension records show Adams was an Atlantic County employee beginning in 2017. Grewal’s office said he was “let go” when the office raised the issue. He did not respond to a phone message left for him.

Callaway was employed by Atlantic Cape Community College. In a phone conversation, Callaway denied working for the county since his prison sentence, but an agenda from the college’s Board of Trustees shows he was hired in “housekeeping” in 2010 after his release. A spokeswoman for the college confirmed Callaway worked there but is not employed currently.

The Pleasantville pair and a court administrator in Paterson are not accused of any wrongdoing in finding jobs again in the public sector. Instead, the findings by the attorney general uncovered lapses in the notification process intended to ensure such workers are not rehired for government jobs.

Prosecutors are required to file so-called forfeiture orders in state court barring anyone convicted of a crime involving their public office from working for the government again.

Government agencies should learn of the orders during the hiring process, Lauchaire said. If that doesn’t happen, then the disqualification should get caught when the state’s pension system enrolls the prospective worker, she said.

Princess Reaves, a former court administrator in Paterson, was charged as part of a broader sting operation with taking $2,500 in bribes in return for steering subsidized housing tenants. In a phone interview, she denied wrongdoing in that case and said she was intimidated into pleading guilty.

She said she has suffered because of the conviction and lost her house.

“It took me 13 years to rebuild my life,” she said.

The attorney general’s review started with Marcellus Jackson, a former Passaic council member who admitted taking bribes in 2007. Jackson resigned last year from his $70,000-a-year job as an assistant to the commissioner in the Department of Education.

Murphy said at the time he believed Jackson had “made a mistake” and paid the price for his actions.

“He did what he needed to do and he raised his hand and he asked for a second chance,” Murphy said last year. “We have to get to a better place and give folks, Marcellus and generations to come a second chance.”

Associated Press news researcher Rhonda Shafner and Press Staff Writer Michelle Brunetti Post contributed to this report.

Craig Matthews / Staff Photographer  

Matthew Doherty, Executive Director of Casino Reinvestment Development Authority. April 10, 2019 (Craig Matthews / Staff Photographer)

Craig Matthews/Staff Photographer/  

Bob McDevitt, president of Local 54 being interviewed by the editorial board of the Press of Atlantic City on Wednesday. (Craig Matthews/Staff Photographer)