It's been a long week for Stockton University.
On Tuesday, university president Herman Saatkamp announced that the school's plans to convert the Showboat casino property into an "Island Campus" in Atlantic City were being blocked by Trump Entertainment Resorts, which owns the Trump Taj Mahal casino next door.
Trump will enforce a 1988 legal covenant that restricts the Showboat property to only one use: as a first-class casino-hotel. Stockton would reopen a hotel on the Showboat site, but classrooms, arts spaces, and student housing replace the casino.
Wednesday, Trump said it wanted to avoid having underage college students next door, potentially trying to gamble at the Taj.
That prompted Dennis Levinson, the Atlantic County Executive, to release a statement Thursday questioning that reasoning — "I was confused" by it, he said — and calling on Trump to not enforce the legal covenant.
Just after 6:30 p.m. Friday, Trump released a new statement, saying it supports a Stockton campus — just not at the Showboat site.
Trump also takes an aggressive stance, listing a series of questions regarding Stockton's due diligence of the Showboat site and suggesting the university look elsewhere.
A Stockton spokeswoman said Friday night that "Stockton is not going to debate this in the media."
Here's a look at the four statements sent this week. The wording is published in full as the statements were received, though formatting may have changed.
Click below to jump to a specific statement:
Statement from Stockton University President Herman Saatkamp
With immense sadness, I am announcing today that Stockton University's efforts to create a residential branch campus in Atlantic City have reached a stalemate.
Stockton tried to establish a full campus in Atlantic City six times during my tenure as president and got kicked in the teeth each time. This time, we were stabbed in the heart.
Candidly, Caesars Entertainment was to resolve a 1988 covenant with Trump Taj Mahal, and we were led to believe that had happened. However, it did not, and Trump Taj Mahal does not want a university campus near its property. As a result, Trump Taj Mahal is going to enforce the covenant that says the former Showboat property can only be used as a first-class casino-hotel. Stockton University and, I believe, Atlantic City are caught in the middle of two corporations.
Working with Atlantic City Mayor Don Guardian, City Council President Frank Gilliam, CRDA, and the City Council, legitimate efforts have been made to create a Redevelopment Zone that would alleviate any issues and create a zone where an institution such as Stockton is permitted and, in fact, would flourish. Their cohesiveness and support have been remarkable.
Trump Entertainment is saying they will stymie these efforts. While our attorneys assure us we will prevail, the delay may be far too costly for Stockton. This gamesmanship prohibits us from
getting into contracts to re-open the hotel portion,
from renovating the building so that it can be used as an institution of higher learning,
from holding summer and fall classes this year,
from entering into agreements with vendors to provide services to students,
and much more.
Simply stated, we would be saddled with an all cash outlay with no revenues in return. It would be unconscionable to submit Stockton University's financial stability to this risk and delay. Doing so endangers the cost of student tuition and creates the potential for job loss among faculty and staff. We cannot afford to just hold this building with no incoming revenues while the two casinos play their own gamesmanship.
We are still working to resolve the issue with Trump Taj Mahal. Should that not work, we are making plans to sell the property and hope that we will be able to close reasonably soon. If we are not able to sell soon, we will close as much of the building as possible and reduce the number of employees on our payroll that we hired to tend to the Island Campus, and unfortunately, the building will set empty.
The result of this morass is that Atlantic City will lose a major economic and community engine and Stockton students lose out on some wonderful academic opportunities. I still hope this will turn around.
Statement sent by Trump Entertainment spokeswoman
We wanted to take this opportunity to set the record straight on the Stockton/Caesars sale of the Atlantic City Showboat Casino.
In 1988 Showboat, Resorts and Taj all agreed to provide for a cluster of casinos at the north end of the Boardwalk, on or near the former Urban Renewal Tract, to create greater customer traffic for all three properties. To that end, the three agreed that Showboat would always be operated as a first class casino hotel and the three properties would be inter-connected by skyways. This agreement was memorialized in a written agreement that was publicly recorded in the Atlantic City property records
In mid-December of 2014, Caesars asked the Taj to voluntarily waive the casino/hotel covenant to permit Stockton College to acquire Showboat and convert it into a college campus. We advised that because the Taj is in bankruptcy, as a matter of our fiduciary responsibilities to our creditors, we could not waive our valuable rights under this covenant without obtaining bankruptcy court approval and without receiving appropriate consideration. We were not offered any consideration for this waiver. This was over three months ago.
The facts are that our company does not think having a college next door to the Taj is good for our company. Having kids under 21 who will attempt to gain entry to the casino and engage in activities reserved for those only 21 and older would create numerous problems we do not want and could damage the Taj's ability to attract customers and regain its financial health.
You do not see a college on the Las Vegas strip.
Both Caesars and Stockton elected to proceed with the Showboat sale even though they were fully aware that we could not waive the casino/hotel covenant as they were asking.
Levinson: Trump Entertainment's Concerns About College Impact "Difficult to Understand"
Atlantic County Executive Dennis Levinson finds Trump Entertainment's concerns about underage gambling difficult to understand as a reason to block Richard Stockton University's plans for an Atlantic City campus.
"When I read the statement by Trump Entertainment that having kids under 21 nearby who might gain entry to the casino illegally would create numerous problems, I was confused," Levinson said. "For years they leased property to Steel Pier right outside their front door that catered almost exclusively to those too young to gamble. They also have restaurants on their properties such as the Hard Rock and the Rain Forest Cafe that also cater to that demographic. I would think it is reasonable to assume that they were able to appropriately handle any potential under-aged gamblers who might be attracted by those amenities or they would not have allowed them to stay when their leases expired."
Levinson stated that numerous other examples belie Trump Entertainment's claim that concern about underage gambling is the reason that they oppose Stockton's plans.
"For the last nine years the Tanger Outlet shops, which regularly attract thousands of college age individuals, bordered the former Trump Plaza Casino. To the best of my knowledge Trump Entertainment never complained about any problem with under-aged individuals attempting to gamble because of the outlet stores. Let's take it even one step further. The Quarter at Tropicana is also a big draw to young people with attractions like the Imax Theater as well restaurants and shops. The Tropicana apparently is able to discourage underage gambling. You mean to tell me that the Taj Mahal is any different?"
According to Levinson, a Stockton Campus in Atlantic City could be a transformational benefit to Atlantic City. "I don't believe that Stockton's presence in Atlantic City is a panacea for all the city's ills, but it would be a tremendous asset and could play a significant role in the revitalization Atlantic City so badly needs. I have no doubt that Trump Entertainment has the talent and ability to deal with any challenges a nearby college campus might bring just as businesses do in other college communities. I urge them to be a good corporate citizen by finding a way to not only accommodate Stockton, but to help ensure its success."
"Whether or not Trump Entertainment is within its legal right in this dispute with Caesars and Stockton University, I would remind them that just because you could do something doesn't mean you should," concluded Levinson. "A reconsideration would certainly be appreciated. We need a break."
Statement sent by Trump spokeswoman
In Atlantic County Executive Dennis Levinson's recent statements regarding the Caesars/Stockton transaction he states that he finds it "difficult to understand" why the Taj Mahal objects to use of Showboat as a college campus.
Trump Taj finds some things difficult to understand as well.
We question why the former Atlantic Club site was not selected? It was closed, in very good condition and not connected to an open and operating casino. It was already deeded to be a non-casino hotel and owned by Caesars. The neighborhood would be ideal for a campus. What happened?
On November 12, 2014 the college was quoted as saying that the transaction was subject to completion of due diligence. Before spending $18 million did Dr. Saatkamp ask to see a piece of paper "resolving" the issue?
Stockton's Dr. Saatkamp reportedly said he was told by Caesars that the Trump issue was resolved. Who was the person at Caesars who told him? Did Stockton's lawyer review a document; does a document even exist?
Was a title company involved in the transaction? Did it insure over Trump's contractual rights? Or did they tell the college it would not? Was title insurance obtained?
Was Stockton's Board informed or aware of this issue?
Shortly after the sale of Showboat, Caesars Entertainment Operating Company filed for bankruptcy.
The Taj is a good corporate citizen and employs over 2,700 people. We all deserve answers to these questions.
Showboat was an operating and reportedly profitable casino employing approximately 2,000 local residents and drew large numbers of gamblers and foot traffic to the Taj end of the boardwalk. Now that it is gone, Taj has felt the negative financial effects.
We believe that if the former Showboat property is put up for sale by Stockton, it will be bought by someone and perhaps the former employees of Showboat and Plaza might find work there.
Executive Levinson thinks a Stockton Campus in Atlantic City could be a transformational benefit to Atlantic City and we agree, however, we disagree on the location.
As we explained in our previous statement, we believe that having a college located next door to the Taj will hurt our business and create numerous problems for us going forward. The scenario of young college students residing full time in a dormitory a few steps away from the Taj is entirely different from allowing families to dine in our restaurants.
Executive Levinson has worked hard for Atlantic County for many years and we are grateful for his service to the County and his continued support for Atlantic City. Perhaps, he can get answers to these questions so that when Stockton does find the right site, it will be the success we all want it to be.