Atlantic City's shuttered Showboat casino-hotel will reopen next month as a hotel only, Philadelphia developer Bart Blatstein announced Friday.
With 852 rooms, it will be the largest non-casino hotel in New Jersey, Blatstein's Tower Investments said in a news release.
"There's a lot more coming," Blatstein said Friday. "This is the start of a much greater plan."
Showboat, along with the Atlantic City Hilton, Revel, and Trump Plaza, closed in 2014 amid fierce gambling competition on the East Coast, which squeezed Atlantic City's only real industry.
Mayor Don Guardian welcomed the news Friday, saying the additional rooms would help bolster tourism during the vital summer months.
"This is just Bart helping us out. He knows we need the rooms. I know that he wanted to wait a while, until he opens up and rebrands the whole property," Guardian said.
Blatstein purchased the Showboat for $23 million in January from Stockton University, which had planned to turn it into a residential Atlantic City campus for thousands of students.
A series of conflicting legal requirements doomed the plan. The university sold to Blatstein and set its sights on a different site in the city.
University president Harvey Kesselman said Friday that he was "extremely happy and pleased" by Blatstein's decision.
A spokeswoman for Trump Entertainment Resorts, which owns the Trump Taj Mahal next door to Showboat, did not return a call for comment. When Stockton owned the property, the Trump casino sought to enforce a legal restriction that the Showboat be used only as a casino-hotel.
In addition to that covenant, Caesars placed a restriction when it sold the site to Stockton in 2014 saying the property could be used for anything but a casino.
The current legal status is unclear. Several people, including the mayor, said they did not know of any court ruling or legal agreement that had resolved the conflicting covenants.
But it's also unclear whether anyone would seek to invoke those legal restrictions and stand in Blatstein's way. Guardian noted that the hotel would likely bring increased traffic to venues around it, including the Taj.
Asked Friday about the past legal hurdles, Blatstein demurred, focusing on the opening of the hotel and the jobs it would bring to the city.
The developer said he was optimistic about the future of the embattled Shore resort city, after a months-long dispute over its finances and governance was resolved last week.
The city has been in financial free fall from the closure of the four casinos, down from what was a dozen, and was on the verge of bankruptcy. State lawmakers had threatened takeover.
Last week, Christie signed into law an agreement that gives Atlantic City until the end of October to develop a long-term financial plan while the state provides tens of millions of dollars in aid.
The agreement keeps the city financially afloat while giving it time to put together a plan to stave off state intervention.
"The state and city working together, coming up with a solution for the financial issues that existed, gave me confidence to quickly activate the hotel," Blatstein said.
State Senate President Stephen D. Sweeney (D., Gloucester), who has been an outspoken critic of the city government and questioned whether the city would be able to put together a plan, said Blatstein's move is a "positive development for Atlantic City and a good indicator about its future potential."
Blatstein said reopening the hotel and two towers would create hundreds of jobs.
Blatstein is known as a developer who takes on projects others consider risky or unlikely, and is credited with sparking a revival in the Northern Liberties neighborhood of Philadelphia. Last year in Atlantic City, he reopened the old Pier Shops at Caesars as an entertainment, shopping, and dining complex he called the Playground.
Blatstein said in a recent interview that the complex has gone from 40 percent occupancy to more than 75 percent since he took over.
"I opened it up by July Fourth weekend and spent millions of dollars. And a year later, now I own the Showboat," Blatstein said Friday. "I purchased that a few months ago, and quickly we're going to open up the hotel. So my confidence and belief in the future of Atlantic City is rock solid."
Guardian said Blatstein's record bodes well for Atlantic City.
"We were amazed what he did with the Pier initially … and Showboat has been a great piece of property," he said Friday. "We're just as excited about Bart essentially rebranding and opening up the rooms and the rest of the facilities."