Icahn: Taj Mahal seems like a goner
He said the casino hotel's finances were dire, and blamed it all on the A.C workers' union.
ATLANTIC CITY - Carl Icahn says the struggling Trump Taj Mahal casino hotel "will almost certainly close." The would-be purchaser said Thursday night that the casino's finances are dire.
The billionaire investor, sounding like a man growing tired of the topic, said that he would not back out of a deal with Trump Entertainment Resorts to acquire the Taj Mahal and pump $100 million into it, though he now wishes he had never answered the phone when the company called him.
"One overriding fact is perfectly clear: The Taj is quickly running out of money and will almost certainly close," Icahn said. "Reprehensibly, the union, instead of working with, and trying to help, the company to keep the Taj alive, is instead doing everything to destroy the possibility of saving the jobs of over 3,000 employees."
Union members said they would picket the casino Friday night to protest a court-ordered termination of employees' health care and pension plans.
Trump Entertainment has declined to comment. It threatened to close the Taj Mahal on Nov. 13 if it did not get a judge to free it from making health care and pension payments for the casino's workers. It now promises to keep the casino open at least through November.
For decades, Atlantic City enjoyed a monopoly on gambling on the East Coast. But as casinos popped up in neighboring states, gamblers no longer needed to drive or ride buses to New Jersey to play the slots or table games. Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.86 billion last year, and it will be considerably less this year, after four closures among what were 12 casinos.
Trump Entertainment Resorts acknowledges that its finances are dire but says it is doing everything it can to preserve the Taj Mahal and the jobs. It previously warned it was in danger of running out of money in early December, before it got a bankruptcy court judge to cancel its contract with Local 54 of the Unite Here casino workers' union. The move saves the company $14.6 million a year.
Icahn also owns Atlantic City's Tropicana Casino & Resort, which he bought out of bankruptcy in 2010. He said he was approached by Trump Entertainment about canceling the $286 million in company debt he owns and converting that into ownership of the Taj. The plan involves his investing $100 million into the casino but only if the union contract is canceled and the state contributes $175 million in aid - a request already rejected by State Senate President Stephen Sweeney. An earlier plan also called on Atlantic City to grant large tax breaks.
Icahn said he had "walked into a hornet's nest here."
"Frankly, several of my advisers have told me that if the city and the state did not come up with the money, they'd be doing me a large favor," Icahn said. "Even if we get the concessions from the city and the state, we're going to lose a lot of money. Everybody thinks I'm trying very hard to do this. I'm not."