The Trump Taj Mahal will not close on November 13 as owners had previously warned. Instead, owners now claim that the struggling casino will stay open until the end of November, but a December closure is not out of the question.
Trump Entertainment CEO Robert Griffin told the Associated Press on Monday that, “As of now we don’t have any plan to close the Taj, but that could change next month. We still need our plan to be approved, and we need assistance from the state with no assurance we’re going to get it.”
Casino Looking for Good Karma to Avoid Closure?
The delay in the Taj’s closure didn’t come because of an influx of funding or promises from the government. Rather, it seems the casino may be trying to tap into a little karma.
According to a post from the Houston Chronicle, one of the primary reasons that Trump Entertainment is delaying the Taj’s closure is so that it can fulfill its obligation to host a Culture Club concert on November 28.
Culture Club and its lead singer Boy George became popular in the 1980’s for their song Karma Chameleon. While this seems an odd reason to keep the casino open, it will give it a couple more weeks to work out a plan to perhaps remain open for good.
Icahn Plan Likely to Be Blocked
Carl Icahn has come forward with a plan to save the Trump Taj that would see him invest $100 million of his own money after converting debt into equity and becoming the official owner of the property.
Part of this plan involves receiving approximately $175 million from the state in the form of tax credits and grants. State Senate President Stephen Sweeney was quoted last week as saying that he would block any request for aid from Trump Entertainment following a bankruptcy court decision last week that will allow the Taj to quit providing pension payments and health care to union members.
Sweeney took to Twitter on Wednesday to explain his stance. A barrage of tweets included the following:
I won’t allow Icahn to use any state grants, tax breaks, subsidies to help underwrite attempt to take away rights and benefits of workers. – If the court’s ruling stands, then middle-class America has lost. We should be building economy from the bottom up by supporting workers. – It’s unfair and un-American to allow billionaires like Icahn to exploit the financial difficulties of the casino industry to prey on workers.”
Icahn has stated that without state support, he will not move forward with his plan. Should Sweeney stick to his guns on this matter, a December closure is all but guaranteed.
Union Members to Picket – Asking Supporters to Boycott Icahn Properties
As warned last week by union attorneys, the Local 54 of UNITE-HERE is planning to picket in protest of the changes to the contract forced by the bankruptcy court. The protest is planned for Friday outside the Trump Taj Mahal. The union currently has around 1,100 workers at the Taj.
Furthermore, the union is asking that their supporters boycott Icahn-owned properties. He currently owns the Tropicana and is considered the de facto owner of the Taj because he owns all of their first-lien debt.
New Jersey State AFL-CIO president Charles Wowkanech spoke out on Wednesday against the bankruptcy court’s ruling. He called the ruling a “short sighted decision [that] drives a stake through the heart of collective bargaining.” He went on to ask union supporters to “consider options other than Icahn-owned properties when booking an event in Atlantic City.”
Will Icahn Change His Tactics?
Based on the backlash from the union and lawmakers, one has to wonder whether Icahn will consider a change in tactics to save the Taj. At present, it appears he will not receive the tax credits he claims to need to save the casino.
If Icahn were to change his mind and reinstate union pension and health care, would that be enough to coerce the state to allow the tax credits and grants? Should such a scenario be possible, it would seem more logical to eat the $14 million that the casino would claim to save from axing pensions and health care in exchange for the $175 million they are seeking from the state.
Ultimately, saving the Taj may boil down to how much both sides are willing to bend. It would seem unlikely that the state would allow a fifth casino to close when they have some chance of keeping it open.
If Icahn really wants to keep the Taj open, he may have to come off some more money or other concessions to get what he wants. If one were to put odds on the Taj’s closure, the current line would probably be around 60/40 in favor of a closure. We should get a better idea of what’s going to happen over the next two to three weeks.