Stockton University will sell the former Showboat Casino Hotel for $22 million to Tower Investments, Inc., headed by CEO Bart Blatstein.
“We really believe Atlantic City is at a turning point. We were seeking a purchaser who demonstrated a commitment to Atlantic City when others were unwilling. Bart Blatstein is such an individual,” interim President Harvey Kesselman said.
Closing of the sale is expected to occur by Nov. 9.
Blatstein, who also owns The Playground in Atlantic City, said by phone that he could not yet disclose specific plans for the site, and had no timeframe for when it might be re-opened.
But, he said, it is a great deal.
“The property offers optionality,” he said.
The agreement allows Stockton to use some of the property’s entertainment venues for performances, while the Stockton Seaview Hotel and Golf Club in Galloway Township would work with Blatstein’s hotel operation to accommodate guests when there is overflow demand.
The university purchased Showboat from Caesars Entertainment for $18 million in December 2014 with plans to develop a residential campus in Atlantic City. But disputes over competing land-use restrictions placed on the property led Stockton to sell the 1.73 million-square-foot property rather than face potentially lengthy legal battles.
The sale allows Stockton to recoup some of the $400,000 per month operating costs on the site. Kesselman said there are also other legal options the university can pursue.
“This got us close to being whole,” he said.
Stockton has filed a claim against Caesars Entertainment Operating Corp., which is in bankruptcy, and this week also released a $350,000 investigative report on the problems with the sale.
Stockton had an earlier agreement to sell Showboat to developer Glenn Straub’s KK Ventures for $26 million, but that deal fell through.
Blatstein said the competing use covenants on the site will be his problem to resolve.
A 1988 covenant on the site with Taj Mahal requires Showboat be used a first-class hotel and casino. Caesars Entertainment added a covenant in 2014 that prohibited a casino at the site.
“Every project has its challenges,” he said. “It’s part of the process. Nothing is perfect.”
Trump Entertainment CEO Bob Griffin said they are pleased with the proposed sale, and that it appears to be a good deal for all parties involved.
Taj Mahal had supported having Stockton locate in the city, but did not want the college next door to the casino because of concerns about underage drinking and gaming. The 1988 covenant had been put in place between Taj and Showboat to create a casino and entertainment complex in that section of the city.
“It is wonderful that Bart bought it,” Griffin said. “We have a great relationship with him. We look forward to a new neighbor and wish him success.”
Blatstein would not say if he would attempt to open a casino at Showboat. He had tried, but failed to get a casino license in Philadelphia.
Blatstein said the $22 million price is a bargain based on both the size and condition of the property. He estimated it would cost well over $700 million to build a similar 1,300-room hotel with 4,000 parking places, a gaming hall and retail sites.
“Stockton took magnificent care of the property,” he said. “It’s still in move-in condition.”
He said he believes in Atlantic City’s future and predicted in three years people who haven’t invested will be “kicking themselves.”
“Everyone wants to go to the shore,” he said. “We just have to give them reasons.”
Blatstein also had no comment on whether he might seek Casino Reinvestment Development Authority funds for the site, or if he would fight the covenants in court or wait for state legislation that has been introduced to resolve them.
Kesselman said Stockton is still committed to assisting with the revitalization of Atlantic City. He said he is grateful to Mayor Don Guardian, City Council, and county and state legislators for their support during the sale process.