The New Jersey Casino Reinvestment Development Authority (CRDA) has granted approval to Showboat Atlantic City to divide its Boardwalk property into new lots of record.
Showboat owner Bart Blatstein filed a subdivision request with the CRDA for approval last month. The petition explained, “The subdivision is sought in order to accomplish future conveying and financing of improvements.”
The CRDA, which has the authority to consider and approve zoning and land-use matters in the Tourism District, signed off on the new parcels without hesitation.
There are many reasons for rezoning a property. Desautel Law, a legal firm which specializes in municipal and regulatory zoning, says that a property owner looking for rezoning is “often times trying to change the intention of what that land was originally used for.”
The law firm said, “There can be a range of reasons behind the want or need to redefine the property, but in most recorded cases, owners decide to rezone property for residential purposes (usually changing a commercial property from one zone to another for future business use).”
August 31, 2014 was the last slot machine or table game bet placed inside the Showboat. That was when parent company Caesars Entertainment closed the resort to try to reduce competition with its other Atlantic City casinos.
As mentioned on the Casino.org website, in late 2014, the Showboat was sold to Stockton University (then “college”) for $18 million. The school intended to turn the building into student housing. However, billionaire Carl Icahn, who owned the neighboring Taj Mahal at the time, successfully used a legal contract dating back to 1988 which says the property can be used only as a “first-class casino resort.”
In January 2016, Stockton sold the Showboat to Blatstein for $23 million. That summer the property reopened as a non-gaming hotel.
Blatstein, a Philadelphia-based real estate developer, owns both residential and commercial properties, but no casinos. In recent months, he’s stated that he’s considering an effort to bring gambling back to the resort which first opened in 1987.
Blatstein gained a “certificate of compliance” from the New Jersey Casino Control Commission (CCC) in March. That is basically the first step in obtaining a gaming license in Atlantic City.
The 1988 agreement was reached jointly by Showboat, Taj, and Resorts. The arrangement was ended in 2016 after Icahn agreed to allow Blatstein to run the property as a hotel.
There’s a deed restriction on the Showboat, however, which is much more critical. When Caesars sold the resort, it put a restriction preventing it from reopening as a casino. Deed restrictions travel with the land, and are hard to have removed.
The Bloom Sluggett law firm in Michigan says, “Once a deed restriction is properly recorded, it remains in the ‘chain of title’ for the property involved forever (or until the time limit specified in the deed restriction), regardless of whether or not later deeds to the property mention or reference the deed restriction.”
The legal experts added, “In some cases, deed restrictions can lie dormant and unknown for years regarding one or more properties, but could potentially still be enforceable.”
The main area in question is what will happen to Showboat’s fifth parcel. Currently the 3.1-acre outdoor plot is packed with beach volleyball courts. Blatstein has been thinking about building a standalone casino there to possibly avoid the casino deed restriction.