Trump Taj Mahal Future is a Gamble
The Trump Taj Mahal is, and has been in jeopardy for some time now. With the future of about 3,000 employees and their families at stake, a possible long term agreement was squashed last week. This pact had the approval of the major players at first, but after careful thought, Carl Icahn withdrew his support. Signed by both Trump Entertainment and the union representing the employees, Unite Here Local 54, the accord would have provided what some thought long term life for the casino.
Carl Icahn is a hedge fund investor that now owns the entire 292 million dollars of debt for Trump Entertainment Resorts. This deal would have given all of the worker’s rights back, along with full ownership of Trump Entertainment to Icahn. After crunching numbers, he saw that the casino is losing 10 million dollars a month. He has since offered to loan 20 million dollars to keep the facility running through bankruptcy proceedings. The agreement would have meant for him to invest another 100 million dollars in Trump Entertainment, which is itself bankrupt.
The closing of the Taj Mahal would be the fifth Atlantic City casino to close this year. Competition within this industry is a major factor for these closings. Surrounding areas, such as Pennsylvania have opened casinos, allowing options closer to home for their gambling and entertainment desires. With the past closings, costs are rising for casinos still open in Atlantic City. The tax base is shrinking for the city, and money helping to support the industry is in decline.
Icahn states that he is still hoping to forge an agreement with Trump, the union, and state and city authorities to shape a long term stability for the casino. With casinos and resorts opening in a number of areas within other states, the long term health of resort towns like Atlantic City and Las Vegas may need some innovative thinking.