Stockton University says developer Glenn Straub isn't serious about buying Atlantic City's former Showboat casino, and its president said Thursday the institution will seek a new buyer for it.
Thursday was the deadline for Straub's $26 million purchase to close, but he sued Stockton on Wednesday, asking for the deadline to be extended while conflicting restrictions on how the property can be used are sorted out in bankruptcy court.
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"Given Mr. Straub's litigious background, it is not surprising he is suing Stockton since it appears as if he has no intention of buying Showboat for the contracted price of $26 million," Kesselman said in a statement. "We will pursue the contract's remedies which include cancellation, and we will actively seek other buyers who want to do what is best for our students, Atlantic City and our region."
The statement did not make clear, however, whether Stockton was immediately terminating the contract. The university would not clarify his remarks, nor would it address how a new buyer would be able to close on a purchase of the Showboat before the competing legal restrictions are resolved.
Straub's lawyer, Stuart Moskovitz, said Stockton has refused to cooperate to salvage the deal.
"It is rather ironic that an individual who refuses to negotiate, refuses to cooperate, refuses to reach an amicable agreement, and would prefer to put his university in financial jeopardy rather than work out a reasonable deal, would call someone trying to resolve the situation litigious," he said. "It doesn't look like the university improved anything by replacing the prior president with the current one."
Former Stockton president Herman Saatkamp retired this year after the Showboat deal hit the rocks.
Under Saatkamp, the suburban university bought the shuttered casino for $18 million in December from Caesars Entertainment, hoping to turn it into a long-sought urban satellite campus.
But legal restrictions over the property's use have prevented that from happening. After it closed the Showboat last August in the name of reducing competition in the struggling Atlantic City gambling market, Caesars imposed a deed restriction preventing the property from ever being used as a casino again. That directly conflicts with a 1988 covenant among Showboat, the Trump Taj Mahal and Resorts mandating that the Showboat not be used for anything other than a casino.
Stockton filed a claim in the Illinois bankruptcy court where a unit of Caesars Entertainment is having its Chapter 11 case heard, asking the judge to sort out the matter. That has not yet happened.
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.
Wayne Parry can be reached at http://twitter.com/WayneParryAC