To prevent another Showboat fiasco — where Stockton University purchased a shuttered Atlantic City casino property that it could not legally use — Gov. Christie signed a law Monday requiring public college and university trustee boards to sign off on large property purchases.
The law requires the trustees and general counsel of New Jersey public colleges and universities to give final approval of any deal to buy property for $10 million or more. It also requires schools to submit a report to the governor’s office, Legislature, secretary of higher education, and state comptroller notifying them within five days of agreeing to such a deal.
State Sen. Paul Sarlo (D., Bergen), chair of the Budget and Appropriations Committee, wrote the bill in response to Stockton’s December 2014 purchase of the Showboat for $18 million from Caesars Entertainment. Plans to create a residential “Island Campus” for thousands of students quickly fell apart in March 2015 when conflicting legal restrictions were made public that required simultaneously that the property must be used as a casino and could not be used as a casino.
Herman J. Saatkamp, who had been the school’s president since 2003, resigned the next month. After more failed plans — including an attempt to sell to Florida developer Glenn Straub — Stockton sold the property to Philadelphia developer Bart Blatstein.
“We can’t allow these types of financial blunders to happen again,” Sarlo said in a statement. “This is a university using public funds.”
Sarlo previously held hearings on the Showboat mess.
A report commissioned by Stockton’s board of trustees placed much of the blame at Saatkamp’s feet. Trustees gave prior approval but did not have to sign off on the final deal, and the board was not told of the legal restrictions that brought down the university’s plans, New Jersey law firm Gibbons PC found.
“Stockton has reaffirmed its commitment to shared governance for planning and communicating decisions with all its constituents, including the trustees, students, alumni, faculty, staff, administrators, the community and other university supporters,” Harvey Kesselman, now president of Stockton, said in a statement. “Out of the learning experience with Showboat, Stockton has developed a public-private partnership with AC Devco that enjoys state, county, city and business support for construction of a new Atlantic City campus.”
The law does not apply to Rutgers University, which holds a unique legal status through an agreement with the State of New Jersey.