The Trump Taj Mahal will become the fifth casino in Atlantic City to go out of business in 2015. According to USA Today, Trump Entertainment filed papers on Friday officially announcing that the casino would close by December 12, a move approved by the company’s board.
Trump Taj Mahal had been struggling for weeks trying to keep the casino operational, even selling equipment from the closed Trump Plaza to raise cash. Primary debt holder Carl Icahn had been rumored to be considering a bridge loan to keep the casino operational through December, a move that he clearly has abandoned.
Icahn had planned to infuse $100 million into the Trump Taj and become the primary owner of the casino as part of a comprehensive bankruptcy exit program. The billionaire was looking for additional assistance from the state in the form of tax breaks and grants to keep the Taj open.
Union Contract Dispute Was Nail in Coffin for Taj
Part of this program required that the casino be allowed to abandon their union contract and discontinue payments for health care and pension. While the judge overseeing Trump Entertainment’s bankruptcy approved the case, the negative fallout helped lead to the Taj’s closure.
Almost immediately, state officials denied assistance to the Taj, citing the dissolution of the union contract as one of the primary reasons. Atlantic City mayor Don Guardian also refused to grant Trump Entertainment any tax relief. Furthermore, the city is currently petitioning to pursue $20 million in 2014 taxes from the company.
Following Friday’s filing, Mayor Guardian tried to save face with the 3,000 employees now faced with unemployment during the holiday season. He stated, “I want them to know that the city of Atlantic City did everything they could to help keep the Trump Taj Mahal open. However, (the company and its officials) still must pay their fair share of taxes, just like our residents do.”
The Local 54 of Unite-HERE has regularly blasted Icahn for trying to take advantage of union workers during this entire process and continued to do so on Friday. Local 54 President Bob McDevitt commented, “We are all waiting for Mr. Icahn to step up and become part of the solution and stop pointing fingers, threatening and demanding. For once maybe he could do the right thing instead of trying to bully everyone.”
What’s Next for Atlantic City?
With the closure of the Trump Taj, over 12,000 jobs will have been lost in the casino industry in 2015. The Atlantic Club closed in January, followed by Showboat, Trump Plaza and Revel. The city has a plan in place to assist displaced workers, but it admittedly could only accommodate up 10% of those workers and that was when the total sat at 8,000.
Two potential bright spots are on the horizon. Revel has been sold to Brookfield Asset Management and the company promises to reopen the casino once they close on the property. While a timeline is not officially in place, this could happen as soon as spring 2015.
Last week, Caesars announced that Richard Stockton College of New Jersey has signed a letter of intent to buy Showboat and open a branch campus there.
While the re-purposing of Revel and Showboat is welcome news to the city, it will not solve all the jobless woes. Some are being forced out of state to find work, while others scrounge for jobs in one of the worst economies in the nation for new job growth.