New Jersey casino regulators have approved billionaire Carl Icahn's Tropicana casino to manage his newest Atlantic City acquisition, the Trump Taj Mahal.
But they did so Wednesday with no guarantee that Icahn will invest the $100 million into the Taj Mahal that he had long promised before a statewide referendum on adding two new casinos in northern New Jersey was authorized for this November.
Icahn has said he won't be able to invest the money into the Taj Mahal if the referendum is approved and there is in-state competition to Atlantic City's casinos.
Tropicana president Tony Rodio, who is also president of a new entity that will manage the Taj Mahal, told the state Casino Control Commission that Tropicana Entertainment, which Icahn also owns, will invest $15 million right away to fix pressing needs at the Taj Mahal. They include leaky roofs in the Chairman Tower, named after former board chairman and current Republican presidential front runner Donald Trump, and fixing up 150 hotel rooms that have been out of service so that they are ready to rent in time for summer. Trump's remaining 10 percent ownership stake in the Taj Mahal was erased when it changed hands in bankruptcy court.
Rodio could not guarantee the commission that any more improvements are forthcoming in the near future.
“It's my job to put forth proposals that provide a good return,” he said. “The uncertainty of north Jersey (casinos) throws some uncertainty into what should be deployed.”
Icahn had long eyed the Taj Mahal, buying up its debt at a steep discount, and eventually swapping that debt in return for ownership of the casino in bankruptcy court. During the Chapter 11 case, he repeatedly promised to pump $100 million into it to make it competitive.
But that changed once New Jersey lawmakers authorized a referendum on allowing two new casinos in northern New Jersey.
Rodio said he will come up with two business plans for the Taj Mahal: one that assumes there will not be casinos elsewhere in the state, and one that assumes there will be.
He could not predict whether Icahn might authorize a lesser investment in the Taj Mahal if the north Jersey casino referendum passes.
“I can't say that with 100 percent certainty,” Rodio said. “If I can put forth something I can show him that shows whether I will get a return, he's never said ‘no’ to us at the Tropicana when we've come to him with something like that.”
Rodio said Icahn is in the same situation with the Taj Mahal that he was after acquiring the Tropicana from bankruptcy in 2010.
“The place had just come out of bankruptcy, employee morale was horrible and the customer base was shrinking,” he recalled. “All those things are happening now at the Taj Mahal.”
Matt Levinson, the casino commission's chairman, said he hopes Icahn will do similar work at the Taj Mahal.
“Mr. Icahn and his management team are poised to breathe new life into the Taj Mahal,” he said. “I expect that this property, which many industry analysts had written off a couple of years ago, will become a vibrant competitor in what is now a smaller Atlantic City gaming market.”
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