Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The Atlantic City casino industry implosion continues. Following the second, and final, bankruptcy of AC's "state of the art" Revel Casino a month ago, as well as the shuttering of Atlantic Club hotel Casino and the Showboat hotel casino, the grim corporate reaper has come for one of the most prominent boardwalk casinos of all: Trump Plaza.
The casino which opened in 1984 as a JV between Donald Trump and Harrah's AC, was for a long time the centerpiece of Donald Trump's one-time Atlantic City empire, which however promptly escalated into a series of sequential bankruptcies, chipping away at Trump's reputation and business model, as one after another of Trump's properties sought Chapter 11 protection.
The final punch came in February 2013 when Trump Plaza was sold to a California company for $20 million – the cheapest ever transaction for an Atlantic City casino, and a fitting testament to the death of this one-time east coast gambling mecca. It was here, however, where a very bored Carl Icahn, once again spread his wrinkled activist wings when in April 2013, as senior lender for the mortgage, Icahn declined to approve the sale for the proposed price and the deal was put on hold.
Unfortunately for Icahn, this is one he may have let go, because as the Philadelphia Inquirer reports, Trump Plaza has decided not to bother with continuing the sale process and will instead shutter permanently. "Trump Plaza Hotel & Casino will shut its doors for good in mid-September, according to state officials who were briefed Friday by lawyers for the casino."
"I believe Sept. 16 is the targeted closure date that we were told," said Assemblyman Vince Mazzeo (D., Atlantic). Mazzeo said he and State Sen. Jim Whelan (D., Atlantic) received a phone call late Friday afternoon from a Trump Plaza lawyer. Atlantic County officials also were briefed, he said.
Mazzeo said the attorney told him that Trump Plaza management plans to make a formal announcement and issue 60-day layoff notices to about 1,600 employees Monday.
"This is another blow to the casino industry here," Mazzeo said. "With mid-September the timing of the closing, it will have a devastating impact on the local economy."
The news will hardly come as a great surprise: there has been speculation for more than a year that Trump Plaza was on the verge of closing. "Like the Atlantic Club, Trump Plaza is one of the city's smallest and oldest gambling halls – it opened May 26, 1984 – and had difficulty competing with the bigger casinos in town and in nearby states, including Pennsylvania."
But while the creditors will be angry they have other sources of income; one group of people even more furious and with zero recourse are the unions. Bob McDevitt, president of Unite Here Local 54, the union that represents most casino workers, led a Boardwalk rally Wednesday to protest Showboat's planned closing. McDevitt, who labeled Showboat's closing "a criminal act" by Caesars Entertainment since the property was still profitable, could not be reached late Friday to comment on the latest casino to fall.
Meanwhile, the city is slowly but surely realizing that its business model is dead.
Whelan, a former Atlantic City mayor, expressed his displeasure Friday night. "I go from depressed and sad to being angry," he said. "When these casinos close, people lose their jobs and their careers. It's a very sad situation."
Employees at Trump Plaza had not been notified Friday of the planned closure, but slot attendant Stan Jelesnianski, who said he has worked there for 21 years, said employees had been worried "for a long time."
"Business has been slow," he said.
According to May 2014 monthly revenues from the New Jersey Division of Gaming Enforcement, the latest monthly data available, Trump Plaza ranked last among the 11 casinos in total revenue, making $5.2 million. Of that total, it generated about $4.6 million from slots, down 19.8 percent from May 2013. And it took in $660,666 from table games, a decrease of 45.6 percent from a year ago.
Its year-to-date total casino revenue of $21.9 million was down 26.7 percent from the same period a year ago.
Charles Pinkett, a Boardwalk rolling-chair operator, said the casino has seemed to be on life support for a while. "The people have been talking about how there's no room service," he said.
The only good news perhaps is that yet another icon of the Trump "empire" – built entirely on other people's money and junk bonds – is being dismantled. After this, there is just one more left…
Mark and Alice Aronson, dining outside, said they were surprised and saddened to hear another casino was on the way out. Alice Aronson, a local therapist, said she had clients from Showboat who were dealing with the pain of the likely layoffs.
"It's a shame," she said. "This is a good place. I heard Donald Trump is not involved anymore. I thought maybe he'd fight for it. It seems, one by one, they're not taking care of their employees."
Trump Plaza's closing would leave one Trump-brand casino in Atlantic City – the Trump Taj Mahal, between Resorts Casino Atlantic City and the soon-to-close Showboat.
We give the Trump Taj 6-9 months before it too joins its peers in the liquidation docket, and the name Trump will no longer appear on the boardwalk for the first time in over three decades. In the meantime, those curious to track the demolition of the Atlantic City gaming empire in real time, can do so at the New Jersey WARN Notice website.
