Carl Icahn May Sell the Trump Taj Mahal to Other Casino Operators
On the day after the New Jersey State Assembly voted 60-to-17 to approve a bill that would keep the Trump Taj Mahal closed for at least 5 years, Carl Icahn announced he was in talks with other casino operators to sell control of the casino.
On Monday, the State Assembly voted to approve a bill to keep casino operators who close a casino from opening that same venue for gambling for a 5-year period. Because the bill was retroactive to January 2016, it was designed to block Carl Icahn from reopening the Trump Taj Mahal with non-union workers, which many lawmakers thought was his plan.
Forced Him to Negotiate with the Union
The bill allowed for the same operator to reopen, but only if the ownership negotiated in good faith with the workers union in the city. Carl Icahn announced he would close the Trump Taj Mahal in October 2016, after the Local 54 of UNITE-Here staged a month-long strike in July.
On Tuesday, the New York Post revealed that Carl Icahn was in talks with other casino operators to sell the property. A source told the NY Post, “He is in dialogue with operators.”
Carl Icahn Criticized Steve Sweeney
Earlier this month, the State Senate approved the same bill, which was sponsored by New Jersey State Senate President Stephen Sweeney. It is unknown whether Gov. Chris Christie plans to sign the bill, but Carl Icahn appears convinced that is likely to happen. It is believed Sweeney might have the votes to override a veto, anyway.
Carl Icahn told the newspaper, “The bill is another absurd antic by Sweeney that will hurt Atlantic City.”
Plan to Reopen with Non-Union Workers
Those familiar with the sale say the sale would allow new operators to take over the 26-year old casino, then reopen it with non-union workers. Therefore, Icahn might be searching for a loophole around the new bill.
When the bill was passed, the early speculation was the bill might be challenged in court. Some legal experts believe the bill might be unconstitutional, because provisions of the bill are retroactive.
Carl Icahn’s History with Trump Taj Mahal
Carl Icahn has had an interest in the Trump Taj Mahal since it opened in 1990. In fact, the activist investor was the biggest bondholder when Donald Trump opened the casino in 1990. Icahn was the biggest bondholder when the casino declared bankruptcy in 2014, too.
In December 2014, the investor forestalled a bankruptcy when he floated the casino a $20 million loan. That kept the casino operating into 2015, and thus preserved his $280 million investment in the property. In March 2016, Icahn completed the sale for the property.
Strike by the Local 54 Workers
Over the next few months, he bargained hard with the Local 54, which accused him of trying to take away the workers’ health and pension benefits. When Icahn announced he was closing the casino in October, leaders of the Local 54 charged that he was trying to convince them to take lower wagers or benefits (or both). Enough lawmakers believed them to pass the new, punitive law.
Now it appears that Carl Icahn is walking away from the Trump Taj Mahal altogether. Those close to the billionaire, who owns the Tropicana Casino in Atlantic City, claim he has lost about $200 million on the Trump Taj Mahal investment to this date.
Regulatory Adviser to President Trump
The decision to sell the Trump Taj Mahal casino comes in a week when it was announced by the Wall Street Journal that President-Elect Donald Trump plans to make Carl Icahn a top adviser on “regulatory overhaul”. It is no secret that Donald Trump and his staff want to eliminate many of the regulations which were put in place to oversee the financial industry after the real estate, banking, and stock market crashes of 2008.
The Bush and Obama adminstrations each passed massive bailouts of elite financial institutions and corporations, but the Obama administration passed regulations which enforced transparency in the banking and lending industries, hoping to avoid another financial meltdown. Financiers, investors, entrepreneurs, and corporate executives have chafed at those regulations, claiming they have slowed the economic recovery.
Donald Trump wants to supercharge America’s corporate and financial sector with tax cuts and deregulation, hoping that spurs the country to the 4% growth he’s promised. Trump has tabbed Carl Icahn as the activist investor with the insider knowledge to advise him on deregulation. As one of the smartest, wiliest, and most farsighted investor of the past several decades, Icahn certainly knows the system as well as anyone.
The Wall Street Journal also reported that Carl Icahn already has tremendous influence with Donald Trump, with whom he’s had a business relationship with at least since 1990. The WSJ reported that Icahn is advising Trump in the selection process for the nominee to replace Mary Jo White as the head of the Securities & Exchange Commission.
