Trouble Continues for Straub & the Former Showboat Casino
A court battle between Stockton University and Glen Straub over who owns the former Showboat Casino continues with Straub seeing his claim of ownership rejected.
Atlantic City is a popular gambling destination that has seen their fair share of troubles over the past few years. Since 2014, five gaming venues have shut down operations and the city is floundering to remain a top gaming attraction for tourists. As casinos began to close, companies and businessmen began to come in to the area and try to purchase property at a premium. One property that shut down in 2014 was the former Showboat Casino. The property has been the subject of a lawsuit, with investor Glenn Straub and Stockton University claiming ownership. Recent developments have spelt trouble for Straub as an appeals court rejected his claim to the former gaming venue.
A Little History
To understand the most recent developments, it is important to note the history of the former casino. The Showboat closed down in 2014 when Caesars Entertainment decided the venue was not profitable enough to remain open. The casino was making money but the market for casinos was subject to larger competition which caused the venue to shut down.
Soon after, Stockton University purchased the property for a whopping $18 million. The university had plans to create an urban campus for college student. However, what the university didn’t know was that deed restrictions would keep them from using the property as they would like.
In 1988, a contract was signed between the Showboat owners, Resorts and Trump Taj Mahal which prohibited the casino from being used as anything but a gaming venue. A second contract was placed on the property that prohibited it from being operated as a casino. This issue was a tough one for the university and they decided to sell to Straub in 2015 for an even higher price of $26 million.
The sale agreement was set for July 2nd 2015 but a settlement was never reached with the deed restrictions. Straub brought the matter of the deed restrictions up in court and argued that the university failed to do their due diligence and solve the issue in a timely fashion. Straub asked that the court give an extension to the agreement so that the matter could be dealt with but a judge denied this request.
Appeals Court Decision
Yesterday, the matter was heard in appeals court and an affirmation was given that upheld the decision by a judge in the lower court, a rejection of the request by Straub.
The casino has been sold by Stockton University to Bart Blatstein, a real estate developer based in Philadelphia. Blatstein was able to pay $23 million for the property and come to an agreement with Carl Icahn, the owner of the Trump Taj Mahal to open the property as a hotel only. The property was reopened last summer.
Straub owns the Revel casino which closed in 2014 as well and has been unable to reopen the property as a hotel and casino, rebranding under the name TEN. Straub wanted to buy the Showboat to be able to connect utilities to the Revel as he has been in another legal battle, this time with the power plant that used to supply power to the property. The problem of power was eventually resolved.
After the decision on Thursday to reject the appeal by Straub, the businessman plans to consider his options. He can try to have the matter heard by the New Jersey Supreme Court. Straub said he is considering the possibility of an appeal.