ATLANTIC CITY, N.J. – The contract between Stockton University and a Florida developer for the former Showboat Casino was properly terminated and the school can find another buyer, a judge ruled Monday.
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Superior Court Judge Julio Mendez ruled that developer Glenn Straub's KK Ventures is prohibited from interfering with Stockton's rights to market the property, The Press of Atlantic City reported (http://bit.ly/1DDvP8Y).
Straub filed a complaint against Stockton July 1 claiming the school didn't do all it could to resolve deed restrictions that both require it to be used as a casino and prohibit it from being a casino.
Stockton's April 3 agreement to sell Showboat to Straub for $26 million expired July 2. KK Ventures is entitled to the purchase price plus interest earned in an escrow account since April, Mendez ruled.
Caesars Entertainment shut the still-profitable Showboat last August in the name of reducing competition in the struggling Atlantic City casino market. In December, it sold the property for $18 million to Stockton, a suburban college that planned to use it as a long-sought satellite city campus.
But Caesars Entertainment placed a deed restriction on the Showboat before selling it to Stockton, preventing it from ever being used as a casino again. That clashed with a 1988 covenant signed by Showboat, the Trump Taj Mahal and Resorts mandating that the Showboat never be used as anything other than a casino.
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Stockton did not get the 1988 covenant resolved before buying the Showboat, and Taj Mahal owner Trump Entertainment Resorts refused to waive it, fearing that underage college students next door would sneak into the Taj Mahal to drink and gamble, exposing the casino to costly fines.
A state Senate panel advanced legislation last month that would absolve Stockton of the conflicting land covenants.
Stockton now spends more than $400,000 a month maintaining the Showboat site.
Straub also owns the former Revel casino next door to the Showboat, but litigation with a power plant and former business tenants have prevented him from reopening it this summer.
Straub envisioned the Showboat as part of a $500 million multifaceted Atlantic City redevelopment plan he named The Phoenix Project.
Information from: The Press of Atlantic City (N.J.), http://www.pressofatlanticcity.com