Caesars and Blatstein feuding over A.C. pier mall

Philadelphia developer Bart Blatstein's heralded entry into Atlantic City has hit an inconvenient snag: Caesars Atlantic City now claims he is a "rogue occupier" of the Pier Shops, which he wants to redevelop.

In an odd series of court filings, Blatstein appears to have become ensnared in a fight with Kevin Ortzman, president of Caesars Atlantic City, which owns the pier, and says Blatstein is trespassing until it says he is not.

Blatstein paid $2.7 million late last year for the right to assume the lease for the troubled high-end mall that juts out over the ocean, which he says he wants to transform into an entertainment venue modeled after places in Nashville; Austin, Texas; and Las Vegas. That deal closed Nov. 17, according to Blatstein's court response, filed Monday.

"He came down as a savior," Blatstein attorney Stephen Hankin said Monday. "He's getting slapped in the face by a casino licensee."

Caesars is trying to recoup back rents and taxes from the mostly failed Pier Shops, which nonetheless still has a popular Apple Store as well as Buddakan and Continental restaurants.

Blatstein says he now worries that Caesars is going to steal his big plans, contained in blueprints he left in Ortzman's hands after discussions that Blatstein said showed no indication that Caesars would object to his involvement.

The casino company has gone to court to get a judge to order Blatstein's "ejectment" and bar him from holding any news conferences about his plans.

(Blatstein canceled one big one planned for this week about the same time the court papers were filed.)

Ortzman accuses Blatstein of trespassing on the Pier, and quotes the developer as threatening to "blast" him in the press and "suck all of the money dry from the Pier." Blatstein denied that and said the court filing was the first hint he had that Caesars objected to his taking over the lease.

On Monday, each side brought two lawyers to speak by speaker phone to Superior Court Judge Raymond Batten, who recused himself because his daughter works for a law firm that represented Blatstein. Another judge was assigned and another conference was scheduled for Thursday.

Blatstein attorney Stephen Hankin said Caesars was violating the state Casino Control Act by interfering with Blatstein's attempt to enhance the city.

Caesars attorney Russell Lichtenstein said Blatstein was going around acting like he owned the Pier. "There's this notion that he somehow bought the Pier, which is false," Lichtenstein said.

On Monday, Blatstein attorney Francis Manning said that he would advise his client not to reschedule his news conference, but that "I cannot agree to stand down" on other matters such as negotiating with prospective tenants at the Pier. Caesars claims Blatstein "has no right to be there" beyond, presumably, going to the Apple Store himself.

Since Blatstein has said he purchased the Pier Shops as Tower Investments, he has had signs up in the mall for prospective tenants, most of which had been removed Monday. Tower has also removed the elaborate water show in the rear of the pier to open up a three-level space, and was scheduled to announce big plans, possibly for a new entertainment venue and other tenants aimed at millennials. His interest in Atlantic City was seen as one of the few hopeful signs for the beleaguered resort.

Caesars now claims the deal is more complicated than that: That Caesars owns the land, that it is owed about $1 million in annual rent, and that it never approved Blatstein's taking over the Pier Shops' lease.

The dispute between Blatstein and Caesars opens another chapter in the tortured financial history of the $200 million Pier Shops, which opened in 2006 and, with its mix of high-end stores and restaurants, was supposed to help Atlantic City compete in a world where it had lost its monopoly on East Coast gambling.

By late 2009, the Pier Shops had stopped paying on a $135 million loan, and it ended up in foreclosure the next year. Lenders took over the property and hired Torchlight Loan Services L.L.C. to sell it.

Torchlight put the mall on the market in June, reaching a deal with Blatstein in October. Blatstein paid $2.7 million for the right to take over a lease that runs through 2078.

The problem for Blatstein is that Caesars has the right to approve the transfer of the lease, and is using that leverage to try to recoup what could be millions in overdue rent.