Las Vegas Sun

March 19, 2024

Angry over Mirage deals, Trump cancels plans for Taj Mahal addition

A planned 40-story 777-room hotel tower will not be built because the state has gone too far in offering incentives to Mirage Resorts Inc., he said in a letter to the state Casino Reinvestment Development Authority chief James Kennedy.

The state and Mirage plan to build a $330 million road-and-tunnel link between the Atlantic City Expressway and the marina district, easing access to the site where Mirage plans a 2,000-room casino resort.

"We're doing that because we think the state of New Jersey is being ripped big league. The taxpayers are being hurt badly by this tunnel transaction," Trump said in a telephone interview from his New York office.

The CRDA, the state Department of Transportation and the South Jersey Transportation Authority plan to help finance the tunnel. Backers say the state's incentives are worth it: Mirage, along with two other casino companies that plan projects at the site, want to invest about $2 billion here.

In the letter to Kennedy, he said his casino hotels represent a $2.2 billion investment in Atlantic City and employ more than 14,000 people. The casinos have made more than $104 million in payments to the CRDA since 1985, he said.

"The CRDA now proposes to commit $55 million of the state's investment alternative tax revenue and $65 million of its parking fee revenue to fund a proposed tunnel-roadway connection for the direct benefit and advantage of a Nevada casino company which left Atlantic City 10 years ago and has not made any CRDA payments or Atlantic City capital investment, not established any Atlantic City work force and not yet commenced construction of, or even applied for, approvals for a casino hotel," he wrote.

Kennedy called the pronouncement a ruse aimed at covering up Trump's inability to pay for the Taj expansion.

He said Trump, who had sought casino reinvestment credits for the Taj Mahal expansion, was going ahead with plans to seek the credits for a $128 million expansion of Trump's Castle Casino Resort.

"If he was really dealing from the high moral ground, he'd be pulling his applications on both. It's a pure and simple business judgment. He's consolidating his resources in one property since that's all he can afford to do," Kennedy said.

The protest marks the latest bid by Trump to block Mirage.

Trump, who owns four casino hotels here, has sniped at the plans from the start. He has fired off angry letters to city and state leaders, taken out newspaper advertisements and appeared on talk shows to denounce various aspects of the deals.

Last week, he filed a civil suit in federal court that accused the state of violating its own casino regulatory laws by using casino revenues to help pay for the tunnel.

Trump is not the only thorn in Mirage's side.

On Wednesday, homeowners and civic groups filed suit in federal court to stop the tunnel plan.

The suit was brought by Lillian Bryant, Carl Briscoe, Gustavia Ellis, Michael F. Johnson, Elwood S. Davis, the Westside Homeowners Protective Association, the First Ward Civic Association and the Third Ward Civic Association.

It names Mirage, the state DOT, state Transportation Trust Fund, the CRDA and the South Jersey Transportation Authority.

Construction of the tunnel would lead to the "effective elimination of the last stable, middle-class African-American neighborhoods in Atlantic City," the suit said.

It was the fourth such suit filed in the last 10 days. A group of Middlesex County mayors have filed two lawsuits because they believe the state transportation money should be spent in their communities.

Mirage, meanwhile, is plowing ahead. Spokesman Alan Feldman said Thursday the company remains committed to the project.

"We certainly don't anticipate that they would stop it. It is painfully obvious to anyone looking at this that it is a carefully orchestrated campaign to delay or stop us," he said.

Mirage has asked the city for an extension of its agreement with the city, giving the company more time to take title to the 150-acre site. The lawsuits, in part, are responsible for the company's inability to obtain the permits needed to build, Feldman said.

The request prompted Hilton Hotels Corp. to offer to replace Mirage as developer.

Hilton executive vice president Arthur Goldberg sent a letter to Mayor James Whelan asking to begin talks. He said Hilton would like to build a casino project "without the need for public subsidy, free land and the reimbursement of remediation costs."

"Hilton would not require extensive time-consuming, disruptive and unnecessary tunnels or other roadway improvements in order to proceed with its development of the (site)," Goldberg said.

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