Aug 03, 2016 The Trump Taj Mahal casino will shut down after Labor Day, the victim of the longest strike in Atlantic City's 38-year casino era. The closure of the casino opened by Republican presidential nominee Donald Trump but now owned by his friend and fellow billionaire Carl Icahn will cost about 3,000 workers their.
The Trump Taj Mahal, an iconic casino hotel on the Atlantic City boardwalk, ceased operations Monday after hemorrhaging money for years and negotiations with an employees' union broke down, according to its owner, billionaire investor Carl Icahn.
The shutdown, which leaves 3,000 employees out of work, was widely expected after management announced the planned closure in August. Beset by labor strife and the decline of Atlantic City as a resort and gaming destination, the hotel lost 'almost $350 million over just a few short years,' Icahn said in a statement Monday.
About 1,000 employees, including cooks, bartenders, housekeepers and cocktail servers, went on strike July 1, seeking health care and pension benefits. Icahn said his last offer, which included medical benefits, was rejected and keeping the Taj open would have required additional investments and result in losses in 'excess of $100 million over the next year.'
The union, Unite Here Local 54, says many workers at the hotel 'have seen only 80 cents per hour in total raises over the last 12 years' while the cost of living in Atlantic City has risen more than 25% during the period.
'Workers are trying to reenter the middle-class after Icahn used the bankruptcy court to strip them of pay and benefits worth more than one-third of their total compensation,' the union said in a statement released last month. 'Housekeepers, servers and other casino workers at the Taj Mahal earn on average less than $12 and hour.'
Icahn's clash with the union employees cost the Taj Mahal an estimated $150 million, the union said.
Meanwhile, Tony Rodio, CEO of Tropicana Entertainment Inc., which manages the hotel for Icahn Enterprises, said in August Icahn has lost about $100 million in trying to run the Taj Mahal after he acquired it from bankruptcy proceedings in February. Tropicana Entertainment is controlled by Icahn Enterprises.
Atlantic City's decline has been well-chronicled as its past reputation as an East Coast gaming center and proximity to beaches couldn't sufficiently compensate for out-of-state competition and the city’s deteriorating infrastructure. Four other casinos in the city have closed since 2014, including Showboat Casino Hotel, Revel, the Atlantic Club, and Trump Plaza Hotel.
The Trump Taj Mahal opened in 1990 after heavy debt financing and years of legal and financial maneuvers by its then-owner Donald Trump, the Republican presidential nominee. When it opened, it was one of the largest casinos in the world, with more than 100,000 square feet of gaming space, and it billed itself as 'the eighth wonder of the world.'
But the fancy billing belied numerous financial woes it faced over the years, including multiple bankruptcy filings by its owners. In 2009, Trump Entertainment Resorts underwent a round of bankruptcy restructuring, in which Donald Trump lost control and the hotel operator company was sold to investment firm Avenue Capital.
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In 2014, Trump Entertainment Resorts, whose assets by now mostly consisted of the Taj Mahal, again filed for bankruptcy protection. When it emerged from the legal proceedings in February, Icahn had grabbed control and the hotel become a subsidiary of Icahn Enterprises.
According to its website, Trump Taj Mahal customers had until 8 a.m. Monday to redeem gaming chips and vouchers at the hotel. After 8 a.m., they can be redeemed at Tropicana Atlantic City’s Casino Cage.
Room bookings on and after Oct. 9 have been cancelled. Room deposits will be refunded, it said.
The illuminated Trump Taj Mahal Casino is seen from a rooftop parking lot at dusk in Atlantic City. (REUTERS/Mark Makela/File)
The Trump Taj Mahal casino will shut down after Labor Day, the victim of the longest strike in Atlantic City's 38-year casino era.
The closure of the casino opened by Republican presidential nominee Donald Trump but now owned by his friend and fellow billionaire Carl Icahn will cost about 3,000 workers their jobs, and reduce the number of casinos in Atlantic City to seven.
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Those job losses will be in addition to 8,000 workers who lost their jobs when four Atlantic City casinos closed in 2014.
And the bloodletting may not be over yet: Voters will decide in November whether to permit two new casinos in northern New Jersey just outside New York City, a development that would likely lead to additional casino closures in Atlantic City.
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Tony Rodio, president of Tropicana Entertainment, which runs the Taj Mahal, said management decided Wednesday it can no longer operate a money-losing property in the midst of a strike. On Thursday, the walkout by Local 54 of the Unite-HERE union will reach its 35th day, eclipsing the 34-day walkout the union staged against seven casinos in 2004.
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'Currently the Taj is losing multi-millions a month, and now with this strike, we see no path to profitability,' Rodio said. 'Our directors cannot just allow the Taj to continue burning through tens of millions of dollars when the union has singlehandedly blocked any path to profitability. Unfortunately we've reached the point where we will have to close the Taj.'
The central issue in the strike is restoration of health insurance and pension benefits that previous owners got a bankruptcy court judge to approve in Oct. 2014. Icahn offered to restore health insurance to Taj Mahal workers, but at a level less than what workers at the city's other seven casinos receive.
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The union rejected that offer.
Donald Trump once owned three Atlantic City casinos, but cut most ties with the city by 2009. Having lost ownership of the company to bondholders in a previous bankruptcy, Trump resigned as chairman of Trump Entertainment Resorts, retaining a 10 percent stake in return for the use of his name. That interest was wiped out in bankruptcy court when Icahn took over in March.
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