Plan to use former Showboat casino as Stockton campus falling apart

ATLANTIC CITY, N.J. -- One of the few silver linings of Atlantic City's brutal casino contraction - the conversion of a shuttered casino into a college campus - is on the verge of falling apart.

Stockton University bought the former Showboat casino last year and planned to turn it into a satellite campus. But an obscure 1988 legal covenant between the casino's former owner, Caesars Entertainment, and its next-door neighbor, the Trump Taj Mahal casino, appears to be thwarting those plans.

College president Herman Saatkamp said Tuesday night the clause requires the Showboat to always be used as a first-class casino resort. He says Trump Entertainment Resorts is enforcing the covenant.

Saatkamp said Stockton is trying to work out a deal with Trump Entertainment, but will sell the property quickly if one can't be reached.

"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," he said. "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."

Bob Griffin, CEO of trump Entertainment Resorts, declined comment, and Caesars officials did not immediately respond to messages seeking comment Tuesday night.

Saatkamp said the university's lawyers believe they would prevail in a legal battle, but they simply don't have time for it. Stockton needs to sign contracts to open a portion of the casino as a public hotel and do renovations to part of the space for classrooms and student housing, and already is deep into plans for summer courses there.

"Simply stated, we would be saddled with an all cash outlay with no revenues in return" the college president said. "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."

The Showboat was one of four Atlantic City casinos to shut down last year. The casino was still profitable, but Caesars Entertainment closed it on Aug. 31 in the name of reducing competition for its three remaining Atlantic City casinos: Harrah's, Bally's and Caesars. The company also was one of two, along with Tropicana Entertainment, that bought and closed the Atlantic Club.

Stockton bought the Showboat in December for $18 million. Its proposed use as a college satellite campus was hailed as an innovative re-use that could be a template for other new uses for former casino buildings.

"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," Saatkamp said. "I still hope this will turn around."