Hard Rock to Buy Shuttered Taj Mahal In Atlantic City, Will Invest More Than $300M
ATLANTIC CITY, N.J. (CBS/AP)—The owner of the shuttered Taj Mahal in Atlantic City has announced a definitive agreement to sell the property to Hard Rock International.
Carl Icahn, Chairman of Icahn Enterprises, acquired the casino in February 2016 when Trump Entertainment Resorts Inc. emerged from bankruptcy.
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"We at IEP are extremely happy with our ownership of the Tropicana Casino & Resort, and after considerable analysis and deliberation we determined that we only wanted to own one operating casino property in Atlantic City. A sale of the Taj Mahal therefore represents the optimal outcome for us. We wish Hard Rock and its partners the best of luck with the Taj Mahal," Icahn said in a statement.
Hard Rock International will be majority owner of the property in partnership with the Morris and Jingoli families. The group will invest more than $300 million to purchase, substantially renovate and re-open the casino.
"We are excited to be part of this revitalization of Atlantic City creating thousands of jobs to help local employment," states Jim Allen, chairman of Hard Rock International. "We are 100 percent convinced Hard Rock Hotel & Casino Atlantic City will be a success."
The partnership will transform the existing Taj Mahal with a complete remodel and rebrand of the property.
"Both the Morris and Jingoli families are honored and excited to partner with Hard Rock International in the rebuilding of Atlantic City," said Jack Morris, CEO of Edgewood Properties. "This is a once-in-a-lifetime opportunity to be a part of revitalizing one of our nation's most iconic destinations. Atlantic City has a rich and dynamic history and we are so proud to help recapture that greatness."
Atlantic City Mayor Don Guardian reacted to the news by saying, "Today is just another example of that optimism and resiliency. "
The mayor went on to say, "Having professional investors like the Hard Rock International group invest in the Taj Mahal will reinvigorate that end of the boardwalk, which includes the Showboat and the Steel Pier. This is also great news for the entire South Inlet and all the projects going on there, like the Boraie housing development project and the reconnection of the boardwalk all the way to Gardner's Basin. All the pieces are coming back together one by one. In addition to Stockton and South Jersey Gas opening up next year, we hope that 2018 will be banner year as we continue to rebuild Atlantic City."
President Trump, who at the time was a Manhattan real estate mogul, dubbed the Taj Mahal "the eighth wonder of the world" when it opened in 1990. But within a year it was in bankruptcy, the victim of unsustainably high levels of debt taken on during its construction.
Trump cut most of his ties with Atlantic City in 2009, stepping down from the company he once ran, Trump Entertainment Resorts, most of which was then controlled by bondholders who swapped their debt for equity in the company during bankruptcy. Trump retained only a 10 percent stake in the company in return for the right to use his name, but that was wiped out last year when Icahn acquired the company from its latest Chapter 11 filing.
Local 54 of the Unite-HERE union went on strike against the Taj Mahal on July 1 when it could not reach a new contract with Icahn to restore benefits that Trump Entertainment got a bankruptcy court judge to terminate in October 2014. Losing millions of dollars a month, Icahn decided to close the casino on Oct. 10, putting nearly 3,000 workers out of jobs.
Many of those workers are expected to be rehired when the casino opens, which might not happen until the summer of 2018.
Senate President Steve Sweeney said the new deal is welcomed news for Atlantic City.
"This deal is welcome news, not just for the two thousand union workers who can look forward to greater job security and a hopefully healthier working relationship with management, but also for the greater Atlantic City region as a whole," said Sweeney. This sale proves that the steps we have taken to stabilize Atlantic City's economy are already paying dividends, in terms of greater confidence and marketability on the part of local businesses.
The new jobs are not expected to open up until summer of 2018.
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)