[toc]Billionaire and Tropicana Casino owner Carl Icahn’s bid to receive tax dollars in order to demolish Trump Plaza appears to be successful. On Nov. 21, the Casino Reinvestment Development Authority preliminarily certified a payment of $5.6 million to help pay the cost of imploding one of the two hotel towers and a bridge.
The CRDA receives funds as the result of a 1.25 percent tax on each NJ casino’s gross gaming revenue. The tax, known as the investment alternative tax, funds redevelopment projects within Atlantic City and has quietly funded other projects around New Jersey.
One possible wrinkle is a new state law that mandates the tax funds go toward paying down the debt in Atlantic City. However, the authority believes the funds it will issue to Icahn are from previous years and not subject to the new restriction.
Icahn has wanted to sell casino since he bought it
The impending implosion is the latest chapter in Icahn’s administration of the former Trump resorts – Plaza and Taj Mahal. He has attempted to sell the properties from the moment he bought them in bankruptcy court in 2016.
He also may be reading the writing on the wall. Icahn is a close friend of both President Trump and outgoing New Jersey governor Chris Christie.
His window of opportunity to unload the property may begin closing in January. So, time is of the essence to present desirable properties to the public.
On the other hand, the Plaza has proved more troublesome to sell due to its age and ground lease. The ground lease, which runs through 2078, will cost its tenant $1 million per year. As primary debtholder, Icahn vetoed a $20 million offer from the Meruelo Group in 2013, saying the price was too low.
The implosion is important for both Icahn and Atlantic City
However, his statement about the aborted sale quickly mentioned his willingness to sell the property for the right price. The upcoming implosion may allow him to play up the site’s location on the Boardwalk. Otherwise, he might have to explain the decaying improvements on the lot.
That combination of location and blight certainly played into the CRDA’s decision. Robert Mulcahy III, the chairman of the state agency, called the land “part of the gateway to the city.”
The final step for the agency will be a hearing to examine the request formally. The agency has not announced a date for that hearing yet.
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