Stockton may scrap Showboat casino campus deal
TRENTON, N.J. (AP) -- The acting president of Stockton University moved quickly Thursday to distance the school from a stalled effort to transform a former Atlantic City casino into a satellite campus, saying its immediate goal is to undo the "mistake."
Harvey Kesselman told a state Senate panel his university still wants to remain in Atlantic City, but not at the former Showboat casino site, which the school bought for $18 million in December with high hopes of transforming it into a satellite campus with rooms for thousands of new students. But the deal has bogged down due to a legal restriction involving the building's use.
"Our goal is to get out from under this as quickly as possible," Kesselman told the panel on just his third day as president. His sudden title elevation came Tuesday after his predecessor, Herman Saatkamp, stepped down following a faculty no-confidence vote.
Kesselman termed the purchase "a mistake," and said that if he were president at the time, he would not have made the deal if he knew of a 1988 covenant among the Showboat, Trump Taj Mahal and Resorts casinos mandating the Showboat property never be used for anything other than a casino resort.
"This was a Stockton mistake," he said. "We will own it and we will correct it."
In response to questions from senators, Kesselman said Stockton still wants a student campus in Atlantic City, but "probably at a different location. Not at Showboat."
Stockton still does not have clear title to the building, which it has agreed to sell for $26 million to Glenn Straub, the new owner of the former Revel casino next door to the Showboat. That deal can be canceled until July 3.
Kesselman said there are active negotiations involving the future of the property, but he would not reveal details. He promised a quick resolution, noting that his time with Stockton will end on July 1 when he assumes the presidency of the University of Southern Maine.
He said Stockton is paying $400,000 a month to own and maintain a building it cannot use.
State Sen. Jim Whelan, a former Atlantic City mayor, said that a state-owned university needs to get approval from the state comptroller's office for any purchase or sale of assets of more than $10 million -- something Stockton failed to do. Kesselman said he expects the state agency would have disallowed the transaction due to legal uncertainty over title to the property.
The City Council in Atlantic City was set to approve a redevelopment zone Thursday at the Showboat property, prohibiting it from ever being used as a casino again in an attempt to bolster the Stockton project, but postponed a vote. The council told Trump Entertainment Resorts to begin negotiations within 24 hours to resolve the impasse.
Trump Entertainment, which owns the Taj Mahal next door to the Showboat, fears that students under the legal age of 21 will sneak into the Taj Mahal to gamble and drink, exposing the company to costly fines. Mayor Don Guardian called on both sides to start negotiating at once.
"If I were Stockton, I'd sit down with (Trump Entertainment CEO) Bob Griffin and Carl Icahn (who is acquiring the company from bankruptcy court) today to see if there's some wiggle room there," Guardian said.
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