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September 26, 2016

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Icahn: Taj Mahal future at risk amid benefits, expansion talks

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Wayne Parry / AP

A union member holds a sign critical of billionaire investor Carl Icahn during a demonstration outside the Trump Taj Mahal casino in Atlantic City, N.J., on Wednesday March 23, 2016, to protest Icahn’s refusal to reinstate health insurance and pension benefits that previous owners eliminated in bankruptcy court before Icahn acquired the casino last month. Icahn, the billionaire investor, accuses Local 54 of the Unite-HERE union, of trying to force the Taj Mahal to close by saddling it with unaffordable financial demands.

ATLANTIC CITY, N.J. — The name on the casino-hotel still says TRUMP in huge letters, but a different famous billionaire now owns the joint.

And like his predecessor, Donald Trump, investor Carl Icahn knows a thing or two about getting attention — and the best deal possible.

On Wednesday night, union members picketed the Trump Taj Mahal casino to protest the elimination of health care and pension benefits under previous owners.

But Icahn has a grievance of his own. He has been loudly protesting New Jersey's plan to expand casinos to northern New Jersey, outside New York City. That's something he fears will destroy what's left of Atlantic City and dissuade him from investing the $100 million he had promised the Taj Mahal to revive it.

Either one of those things could kill the casino, which has been teetering on the brink for nearly two years as Atlantic City's shrinking casino industry is battered by one threat after another.

"It's clear to me that Carl Icahn has no intention to treat workers with respect in Atlantic City," said Bob McDevitt, president of Local 54 of the Unite-HERE casino workers' union. "He has the keys; now he has to pay the consequences for his actions."

In October 2014, the Taj Mahal's former owners, Trump Entertainment Resorts, got a bankruptcy judge to allow it to end health care and pension benefits for workers and to instead provide a stipend for employees to sign up for coverage under the Affordable Care Act. By then, Trump — the current front-runner for the Republican presidential nomination — no longer owned or controlled the casino company he had founded; his 10 percent ownership stake was erased when Icahn took over Feb. 26.

The benefits were ended before Icahn took over the Taj Mahal but while he was keeping it afloat financially. The union says previous owners acted with Icahn's knowledge and approval in terminating benefits; Icahn denies this. He also owns Atlantic City's Tropicana casino, where union benefits remain in place.

Since then, the union has engaged in nearly a dozen public protests and pickets, as well as a long legal battle, to try to get the benefits restored.

Icahn said Wednesday that McDevitt "has been trying to close the Taj Mahal for two years" and repeated his accusation that the union chief had a hand in the closings of four of Atlantic City's 12 casinos in 2014 by deluging them with costly demands.

"You can't do what McDevitt wants and continue to exist if you're a small casino," Icahn said. "He wants to end up with three, maybe four casinos that will do whatever he says."

McDevitt replied by calling Icahn "fundamentally dishonest" and likening him to "a petulant child" who wants others to clean up his messes.

Icahn is also fighting New Jersey's effort to expand casino gambling beyond Atlantic City, where it has enjoyed an in-state monopoly, to the northern New Jersey suburbs just outside New York City. Voters will decide in November whether to approve two new casinos there. If they do, Icahn says, he won't invest the $100 million he had planned to put into the Taj Mahal.

"Simply put, north Jersey gaming will probably be a death sentence for the Taj and the Atlantic City economy," Icahn wrote in a letter to Taj Mahal employees this month in anticipation of the rally. "This is the issue that will make or break Atlantic City. This is the issue we should all be rallying against."

McDevitt said Icahn can't be trusted.

"Carl Icahn is responsible for whatever happens at this facility," he said. "Workers demanding what really is their birthright in this industry is not what's going to close the Taj Mahal. What's going to close it is poor management and treating workers horribly. Seven other properties are providing what Carl Icahn took away, and they're doing pretty well."

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