Carl Icahn is Carl Icahn. He doesn’t play nice. He doesn’t care whether you like him. And right now, he has Atlantic City and the state Casino Reinvestment Development Authority over a bit of a barrel.
Icahn wants to demolish the Trump Plaza casino hotel, which closed in September 2014, and he wants the CRDA to provide $5.6 million of the estimated $13.2 million needed for the job. The CRDA has agreed to consider the project, but opposition has been widespread. Democratic Senate President Steve Sweeney, Atlantic City Mayor Don Guardian, Caesars Entertainment Regional President Kevin Ortzman (who, as the industry representative on the CRDA, took the rare step of voting against another casino’s proposal) and others are demanding the CRDA reject the request.
Icahn, of course, relishes his anti-union, bad-boy image, and his many critics want to know why public funds should be used for a demolition. But the answer to that question is simple: The law allows it, and Icahn makes a reasonable argument for getting the funding.
The money in question is the so-called Investment Alternative Tax — a 1.25 percent levy on gross gaming revenue that every casino must pay to the CRDA. Currently, that money has been redirected to the city to help pay down its crippling municipal debt. But the $5.6 million Icahn wants is unspent IAT money that Trump Plaza paid to the CRDA prior to the latest change. And under the longstanding statute that governed the CRDA at the time, that money can be used for individual casinos’ nongaming projects if those projects promote economic development in the city.
Yes, that can include just about anything — and has been used for just about anything over the years, from hotel room renovations to conference centers to new facades. Maybe someday, the Legislature can revisit that debate. But there’s nothing wrong with Icahn asking for this money to help fund the Trump Plaza’s demolition. After all, the economic benefit is obvious. Letting a closed casino slowly deteriorate and become an eyesore right at the main entrance into Atlantic City is certainly not good for the city. And make no mistake, Icahn is perfectly willing to let that happen. Nobody is going to out-hardball Carl Icahn. Don’t give him the money, and he can afford to let the Trump Plaza just sit there and rot.
Much of the criticism stems from the fact that Icahn has presented no clear plan for redevelopment of the site. Icahn’s proposal foresees only a parking lot on the footprint of the demolished casino. But this is a man who has invested hundreds of millions of dollars in the Tropicana casino hotel, which he also owns. There’s no reason to tie Icahn’s hands right now, when so much is in flux in Atlantic City. Obviously, this key site has the potential to mean much more to the city, either under Icahn or a subsequent buyer. But at the moment, tearing down the Trump Plaza is economic benefit enough. Give him the money.
