Officials hold closed meeting on fate of former Showboat

ATLANTIC CITY - Behind closed doors in the mayor's office, parties interested in the fate of the former Showboat casino hotel met Friday to try to resolve a tangled legal impasse.

But when the meeting at City Hall was over, no one - including Mayor Don Guardian and Florida developer Glenn Straub - would say what had transpired, citing confidentiality.

Also in attendance were representatives of Stockton University, which bought the shuttered Boardwalk casino with a plan to turn it into a campus, and of Trump Entertainment Resorts.

Trump Entertainment owns the neighboring Trump Taj Mahal, and has refused to waive a 1988 deed restriction requiring the Showboat property to be utilized only as a "first class" casino.

In a resort town with faltering casino revenues and subsequent rampant unemployment, city officials contend that Stockton's plan would be a boost to sagging fortunes.

But on Wednesday, Stockton trustees agreed to spend as much as $350,000 to investigate the school's $18 million deal to buy the Showboat, made late last year.

The university awarded the contract to Gibbons P.C., a law firm in Newark. The state-run university, based in nearby Galloway Township, agreed to buy the property from Caesars Entertainment in what some have termed a "hurried deal."

Caesars declared bankruptcy in January, and when it closed the Showboat in August, it imposed a contradictory deed restriction on the property, prohibiting any future purchaser from opening a casino on the site.

Stockton president Herman J. Saatkamp Jr. last month resigned and went on immediate medical leave amid controversy over the Showboat, which is costing the university about $400,000 a month to maintain.

Saatkamp previously indicated that during the purchase, Caesars assured the university that the 1988 covenant would be superceded by its new deed restriction.

The university has a deal to sell the Showboat to Straub for $26 million, although officials have indicated that may be in jeopardy.

And the City Council is set to approve a new redevelopment plan that would rezone the Showboat site and could effectively eliminate the 1988 covenant, officials said.

"We're trying to bring everyone to the table to see if the project can be saved, if the college is interested in this location or a different location in the city," Guardian told the Associated Press before Friday's meeting. "A university is certainly a very important part of our city."

Trump Entertainment has said it is not in favor of the plan for Stockton to use the Showboat because of concerns that students under 21 - the legal age to drink and gamble in New Jersey - will sneak into the Taj to use the facilities and expose Trump to fines and lawsuits. Trump has also said that because it too is in bankruptcy, it cannot waive the covenant without the approval of a bankruptcy judge.

After Friday's meeting, it was unclear whether the parties will attempt to work out a deal or head to a likely protracted court battle.