Billionaire investor Carl Icahn had previously claimed that the casino couldn’t survive without ending the hugely costly pension and healthcare programs it provided to staff. Both Icahn and Trump Entertainment Resorts expressed their optimism following Judge Kevin Gross’s decision to terminate its contract with Local 54 of the Unite-HERE union.
“We are proud of our efforts to keep the Trump Taj Mahal open, to deliver our loyal customers a continued first-class gaming experience and to have the ability to save 3,000 jobs in a very difficult Atlantic City economy,” said Robert Griffin, CEO of Trump Entertainment. “We look forward to working with our elected officials. With bipartisan leadership we believe we can take a collective step toward a brighter future in Atlantic City.”
Trump Taj Mahal: Union reaction
Understandably, union leaders were less enthusiastic about the developments, which means that they have lost guarantees on wages, pensions and health care.
“The decision today will certainly enrage the workers who have relied on and fought for their health care for three decades,” said Bob McDevitt, president of Local 54. “We intend to continue to fight this both in the courts and in the streets,” referring to a plan to picket the casino next Friday.
In a swipe at Icahn, McDevitt said: “He has a long history of eliminating, reducing or freezing worker benefits which sometimes saddles government agencies with the burden of cleaning up the mess.”
Icahn’s involvement in Trump Taj Mahal
Icahn has rejected criticism from the union and spoke out on his plans for the casino. He currently owns $286 million of the Taj Mahal’s debt, and has expressed a desire to swap that debt for ownership, with a view to investing $100 million into the casino.
That investment depends on government aid from Atlantic City and the state of New Jersey. Icahn previously saved the Tropicana casino in a similar manner. So far requests for union concessions and tax breaks have been rejected by Atlantic City, and Icahn has shifted his attention to state legislators.
He is asking for $175 million in relief through a PILOT program, payments in lieu of taxes, and two state economic grants which are not usually given to casinos.