On Wednesday, the Press of Atlantic City broke the news that the Florida-based HRI had agreed to take the Taj Mahal off Carl Icahn’s hands. The media outlet quoted New Jersey state Senator Jim Whelan saying he understood the deal was a go but couldn’t get either company to confirm.
Later on, Icahn’s company Icahn Enterprises, which also controls Atlantic City’s Tropicana Casino, issued a statement saying it had “determined that we only wanted to own one property in Atlantic City. A sale of the Taj Mahal therefore represents the optimal outcome for us.”
Later still, HRI issued its own statement laying out its plans for the rebranded Hard Rock Hotel & Casino Atlantic City. HRI says it will invest “more than $300m to purchase, substantially renovate and re-open the casino.”
HRI chairman Jim Allen said his group was “excited to be part of this revitalization of Atlantic City creating thousands of jobs to help local employment.” Allen says he’s “100% convinced” that the property will be a success.
HRI, which is controlled by Florida’s Seminole Tribe, operates six casinos in that state and five more abroad. HRI will be the majority owner of the Atlantic City casino, while minority partners include the families behind New Jersey developers Edgewood Properties and Jingoli Construction.
HRI flirted with the idea of setting up shop in Atlantic City five years ago but backed off due to the dire market conditions that ultimately led to the closure of five of AC’s 12 casinos. But HRI already operates a Hard Rock Café within the Taj Mahal, so it’s not like the company doesn’t know what they’re buying.
It remains to be seen how HRI will approach the labor issues that doomed Icahn’s tenure as Taj Mahal owner. Icahn closed the Taj last October after failing to reach agreement with the property’s unionized workers, who objected to Icahn cancelling their health and pension benefits.
It’s equally unclear that Atlantic City’s seven operational casinos will welcome the new/old competition. The market had been on a decade-long decline as casinos in other states siphoned off gamblers but things recently started to turn around, partly due to what some operators referred to as the market’s ‘rightsizing.’