- Billionaire investor, Carl Icahn, struggles to cut deal to sell Atlantic City casino, Trump Plaza
- $1 million-a-year ground lease proving to be a sticking point on venue’s future
Carl Icahn, who also owns the Tropicana Casino and Resort, is struggling to sell the troubled Trump Plaza in Atlantic City.
US President, Donald Trump stepped down from his company, Trump Entertainment Resorts in 2009, effectively removing his involvement in all the Atlantic City ventures. The Trump name originally remained associated with the venture courtesy of a 10% stake in the company. However, that was removed in 2016 when Icahn acquired the company.
Lease price a sticking point
Apparently, the Trump Plaza, which has been closed since the end of 2014, has a $1 million per year ground lease that is set to run through to the end of 2078. These payments are made to the current owner of the real estate on which the 33 year old building sits. The prospect of taking on such a long-term financial commitment is clearly unattractive to Icahn’s prospective purchasers. It has been reported that Mr Icahn was considering demolishing the building entirely.
The lease on Trump Plaza is currently held by a company headed by 89-year-old Robert Lifton. Mr Lifton owned the land and brought Donald Trump in as a business partner in the now US President’s first Atlantic City entertainments venture. The lease takes precedence over the existing Trump Plaza debt.
In February last year, Icahn took control of both the former Trump-owned properties, choosing the close the money-losing Taj Mahal last October, following union strike action and spiralling debts.
Given the current circumstances, Icahn may live to regret his 2013 decision to reject an offer of $20 million for the Trump Plaza from the Meruelo Group on the basis that the offer was not high enough.
Icahn has chosen to abandon his investments in Atlantic City as he believes that Phil Murphy who is on the Democrat’s side will become governor, making it too difficult for him to continue to operate in the state.
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