Icahn Claims State Senator is ‘Selling Out Atlantic City’
ATLANTIC CITY - Carl Icahn accused New Jersey's Senate president of "selling out" Atlantic City by considering casinos near New York City, while the legislative leader said the state would not give the billionaire investor the tax breaks he is seeking.
Icahn responded Friday to stinging criticism by Stephen Sweeney (D., Gloucester) and others about Icahn's role in a proposed bailout of the struggling Trump Taj Mahal Casino Resort. Icahn said he would give the casino $100 million, but only in return for union givebacks and tax credits.
Sweeney on Friday ruled out any state contribution to Trump Entertainment Resorts' proposed transfer to Icahn. That made it even more likely the Taj will close Nov. 13, as Trump Entertainment has threatened to do.
Icahn said Sweeney, who is also a union leader, "is selling out Atlantic City" by publicly considering expanding casino gambling to the Meadowlands - something he and many other South Jersey politicians once solidly opposed. Icahn noted that he bought the Tropicana Casino & Resort out of bankruptcy four years ago when it was in danger of closing, invested in it, and added jobs.
"Sweeney is selling out Atlantic City to Northern New Jersey on the one hand, and now he's telling all these employees in Atlantic City that Carl Icahn is to blame, when I'm the only one that took a risk with $80 million when no one else would," Icahn said.
He said investors were shying away from Atlantic City because they were afraid casinos would be approved for North Jersey, killing the resort's monopoly on gambling in New Jersey.
"On the one hand, we are to believe Sen. Sweeney is Atlantic City's staunchest defender, yet on the other hand, the same Sen. Sweeney is off in North Jersey making plans to allow gaming outside of New York City, a concession that may mean the end of gaming in Atlantic City," Icahn said. "Sen. Sweeney, what you are doing here is selling out the people you represent in a remarkable act of contortionism. Harry Houdini would be very proud."
In July, Sweeney spoke at a news conference with Atlantic City Mayor Don Guardian and State Sen. James Whelan (D., Atlantic) about the possibility of expanding casino gambling beyond Atlantic City, which would require amending the state constitution. At the news conference, Sweeney was vague about what expanding casinos outside Atlantic City would entail, promising only that he would not put forth any bill that did not sufficiently help Atlantic City.
Trump Entertainment has crafted a proposal to keep the Taj open and turn it over to Icahn, who owns about $285 million of the company's debt. Under the plan, Icahn would invest $100 million into the casino, but only if Atlantic City drastically reduced the company's property tax assessment, union workers gave up their pension and health insurance, and a state redevelopment agency contributed $25 million in tax credits.
Atlantic City and the state have rejected those terms. Trump Entertainment is seeking to have a Delaware bankruptcy judge let it terminate its union contract. A decision could come next week.
In a court filing Friday, Trump Entertainment accused the union of preparing to sacrifice the jobs of 3,000 Taj Mahal workers to protect workers at other casinos. Concessions the union agrees to at Taj Mahal would then be allowed at all other Atlantic City casinos under a long-standing clause in the union contract.
The filing also says that the Taj Mahal has not gained new customers since Revel and the Showboat closed five weeks ago. Rather, its revenue has decreased by 20 percent.
At the Boardwalk news conference, politicians from both parties criticized Icahn.
"You get nothing from us until you treat workers with respect and dignity," said Sweeney, ironworkers' official.
The Taj Mahal would be the fifth of Atlantic City's 12 casinos to go out of business this year.
