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ATLANTIC CITY, N.J. (AP) — Atlantic City's mayor says all sides involved in the stalled deal to transform a shuttered casino into a college campus will meet Friday to try to find a way out of the morass.
Don Guardian said Tuesday the meeting will include Florida developer Glenn Straub, representatives of Caesars Entertainment, Trump Entertainment Resorts, and Stockton University.
Stockton bought the Showboat from Caesars in December for $18 million, hoping to convert it into a satellite campus. But Trump Entertainment is invoking a 1988 legal covenant prohibiting Showboat from being used as anything other than a casino.
Stockton has reached a deal to sell the casino to Straub for $26 million, but has 90 days to back out of it. The university says its top priority is resolving the impasse as quickly as possible, adding its future in Atlantic City probably lies somewhere else.
"We're trying to bring everyone to the table to see if the project can be saved, if the college is interested in this location or a different location in the city," Guardian said. "A university is certainly a very important part of our city."
The deal, which is costing Stockton $400,000 a month for a property it cannot use, is in legal limbo due to competing claims and restrictions. In addition to the 1988 covenant between Trump Entertainment, Showboat and Resorts mandating that Showboat not be used for any other purpose, Caesars imposed a contradictory deed restriction on the property when it closed Showboat on Aug. 31, prohibiting any future purchaser from re-opening it as a casino.
And the City Council is set to approve a redevelopment zone at the Showboat site, prohibiting it from being used as a casino again, effectively thwarting the 1988 covenant among the three casino companies.
Trump Entertainment owns the Trump Taj Mahal next door to Showboat, and fears students under the legal age of 21 will sneak inside to gamble and drink, exposing the company to costly fines. It also notes that because Trump Entertainment is in bankruptcy, it cannot waive the covenant without receiving some sort of compensation that must be approved by a bankruptcy judge.
The competing claims seem likely to end up in a protracted court battle unless a voluntary resolution among the parties can be reached.
Wayne Parry can be reached at http://twitter.com/WayneParryAC
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