Deal to keep Taj Mahal open disintegrates

The development extends an acrimonious three-month standoff that has threatened to close the sprawling Agra-themed casino resort, put 3,000 employees out of work, and turn the casino into the ultimate white elephant on the Boardwalk.

Under the tentative deal reached late Wednesday night, Icahn had given in to union demands, restoring health and pension benefits he had gone to court to revoke, and giving up on attempts at outsourcing and new work rules, including increased room cleaning quotas and the elimination of paid meal breaks.

In return, Unite Here Local 54, had said it would withdraw an appeal of the federal bankruptcy court ruling that allowed Icahn and Trump Entertainment to vacate the union contract. The Taj Mahal had been scheduled to close at 5:59 a.m. Saturday, but a deadline to file final notice of that passed on Wednesday. It would have become the fifth of Atlantic City's 12 casinos to go out of business this year, joining Atlantic Club, Showboat, Trump Plaza and the Revel.

"This is what we have been dealing with for some time now at this property," McDevitt said. "We are disappointed that Mr. Icahn's whims are going to add to the feelings of uncertainty and instability that workers have had to live with and have to endure during this holiday season and beyond.

"We and everybody else thought we could start moving Atlantic City forward, but it is unfortunate that one person could put the brakes on all that."

Icahn did not respond to a request for comment.

The 34-year-old casino at 1000 Boardwalk was to pass over to 78-year-old Icahn, a self-styled billionaire brawler who took over the Tropicana in 2009, invested his millions, and turned that casino into a profitable one that attracts roving bands of partying millennials on weekends and throughout the summer.

Icahn has promised to invest US$ 100 million into the Taj Mahal to turn the flailing casino around, provided the state provides sufficient tax relief. The Taj Mahal, once the most profitable casino in Atlantic City, is still considered an attractive convention hotel with a favorable location across from the newly renovated Steel Pier, whose owners have opened pubs and are planning to build a large Observation Wheel modeled after the London Eye.

The Icahn-Local 54 battle had played out in public in a series of noisy protests staged by the union and in letters penned by Icahn and Trump executives pleading with the union to meet their demand to drop the appeal.

But in the end, the tentative deal was brokered by phone at the state level, led by Jon Hanson, Gov. Christie's point man on Atlantic City, and state Senate President Stephen Sweeney (D., Gloucester), who is ushering through legislation to satisfy the casinos and stabilize the city's finances.

Robert Griffin, CEO of Trump Entertainment, has said the bankrupt casino is losing US$ 10 million a month. Icahn also controls the shuttered Trump Plaza, which is expected to be demolished and repurposed into an extension of the Tanger Walk Outlets and the soon-to-open Bass Pro Shops.

Griffin's last letter was to Icahn himself, begging for US$ 30 million to keep the casino alive through the first few months of 2015 while the union pursued its appeal. Griffin was not expected to stay with the company.

A financial assistance package for Atlantic City's eight casinos and for the city's municipal finances is expected to be passed by the state Legislature as early as Thursday.

It would let casinos make reduced payments in lieu of taxes for 15 years, help pay down Atlantic City's debt, and prohibit the casino tax appeals that have undermined city finances. It would also divert casino reinvestment tax from the Casino Reinvestment Development Authority to the city's debt.