Trump Plaza to Be Imploded
Atlantic City now has seven open casinos, and before next summer Hard Rock will make it eight. That would certainly suggest that the town is on the rebound. But if that is the case, why are three of the four casino hotels that closed in 2014 still standing empty?
Another One Bites the Dust!
Another Atlantic City casino is now on the chopping block, but don’t worry–it’s not any of the seven currently operating casinos, all of which are doing very well. The casino hotel slated for demolition is the only remaining Atlantic City property once owned by Trump that closed in 2014 and has remained in limbo ever since–Trump Plaza. Carl Icahn acquired it at the same time he acquired the Taj Mahal, but unlike the Taj Mahal, he still owns it because no one else will buy it.
This hotel casino that President Trump once proudly called “Atlantic City’s centerpiece,” closed in September, 2014 and has been standing vacant and neglected since then. Despite the property’s ideal location, Hard Rock International, which bought the former Trump Taj Mahal for a mere $50 million earlier this year, was not interested, and no other potential buyers have come forward..
Icahn could have chosen to put some of his money towards improving the shuttered property to make it more marketable, but instead, Trump Plaza, like the Sands in 2007, will be imploded.
Why Removing Trump Plaza from the Landscape is Believed to Be Beneficial for Atlantic City
Many experts feel that the plan to raze Trump Plaza is a good idea. They believe that the demolition would make available several acres of prime real estate that could attract millions of dollars in investments in new projects that would be very beneficial to Atlantic City. According to Ken Calemmo, CEO of Cooper Levenson and co-chairman of the Economic Development Coalition of the Greater Atlantic City Chamber, “the Plaza has one of the best locations in the city. It sits at the base of the expressway and in the center of the Boardwalk. You are guaranteed 29 million plus visitors passing every year.”
What Needs to Be Done at Trump Plaza First
According to Mayor Guardian, the Trump Plaza implosion is expected to get underway in the spring of 2018. However, prior to any demolition crews being called in to start work, a lot has to happen. Both the preparation phrase and the demolition itself are going to take a lot of time and be very costly.
Clearing and Liquidation of Contents
Obviously, the building needs to be completely cleared, but that is only a small part of the preparation. There is one possible silver lining though. During the emptying out of the rooms, you could get lucky and find something you actually need or want at a rock bottom price.
Just as interested persons had the opportunity to buy furniture and other items in the liquidation sale earlier this year at the Trump Taj Mahal, you are being given a similar opportunity to scrounge around for potential bargains at the Trump Plaza. Last Sunday, an auction was held for some of the higher priced items like giant brass and glass display cabinets, chandeliers, and an antique fountain, with starting bids, respectively, of $1,000, $1,500, and $5,000. Those looking for more more affordable merchandise will no doubt also have the opportunity to select something that catches their eye from this venerable casino hotel.
Then the Building Must Pass Inspection
After the Plaza is stripped bare, inspectors will be called in to check for asbestos and other health and safety hazards and remedy any lingering problems. The building has deteriorated considerably, so safety is an obvious concern. In addition, a demolition permit needs to be filed with the city.
Yet even with all the preliminary work before the demolition can start, Dale Finch, Director of Licensing and Inspection for the city isn’t worried about possible delays. He is confident that the building will be ready for razing soon and that “it’s going to come down over the next four months.”
Icahn Wants the CRDA to Help Cover the Demolition Costs
All of the Atlantic City casinos pay an annual “Investment Alternative Tax” to the Casino Reinvestment Development Authority (CRDA) amounting to 1.25% of their gross revenue. Prior to the state takeover of Atlantic City, those funds were typically used to help fund approved non-gaming expansion projects. However, as a result of the takeover, the money is now being used to to help reduce Atlantic City’s debt.
Carl Icahn, present owner of the Trump Plaza, has applied for permission to use his company’s $5.6 million contribution to the fund to help cover the demolition costs. Although calling the demolition of a property non-gaming expansion is a bit of a stretch, looking ahead, it could have that result. In addition, the tax was paid before the state takeover went into effect, so Icahn feels his request has merit. Furthermore, Borgata Casino Hotel & Spa received CRDA funds of $15 million to convert Mixx Nightclub into Premier and Tropicana Atlantic City received $18 million to help pay for room renovations.
Demolition Expected to Take 15 Months and Cost More Than $13 Million
The CRDA has agreed to review the request and will make its decision at a later date. It is anticipated that the demolition will cost about $13.2 million and take 15 months to complete. Mayor Guardian has indicated that he agrees that the Plaza should be razed because of the potential for other businesses to make investments that will bring new revenue to the city. However, he is against using CRDA funds to finance the demolition, pointing out that Icahn was responsible for the property closing and the associated job loss.
There seems to be a general consensus that Trump Plaza should come down, but some dissension as to whether the CRDA should help pay for it. I am opposed to having any of the money come from CRDA funds, which can certainly be used for other worthwhile purposes. In addition, I have mixed feelings even about having the property imploded. Not only is it going to cost a fortune, but for over a year there is going to be a full block in the center of town reduced to rubble and debris. I would have liked to see Icahn spend his money instead restoring the property to make it more marketable.
When the Sands, which was also ideally situated near the Boardwalk and beach, was imploded back in 2007, there was talk of building a $2 billion mega-resort in its place. Now, 10 years later, we have nothing built in its place, just an empty lot reminding everyone of the failed casino that once stood there. Once the Trump Plaza is gone, will the hoped for investors with the funds and foresight to create something great in its place materialize? Maybe, but no one knows for sure. It looks like a very expensive gamble.
What Do You Think?
What do you think? Should the Trump Plaza be imploded? If so, should the CRDA help pay for it? What kind of facility would you like to see replace it?