ATLANTIC CITY, N.J. (AP) -- The Trump Taj Mahal casino will shut down after Labor Day, the victim of the longest strike in Atlantic City's 38-year casino era.
The closure of the casino opened by Republican presidential nominee Donald Trump but now owned by his friend and fellow billionaire Carl Icahn will cost about 3,000 workers their jobs, and reduce the number of casinos in Atlantic City to seven.
Those job losses will be in addition to 8,000 workers who lost their jobs when four Atlantic City casinos closed in 2014.
And the bloodletting may not be over yet: Voters will decide in November whether to permit two new casinos in northern New Jersey just outside New York City, a development that would likely lead to additional casino closures in Atlantic City.
Tony Rodio, president of Tropicana Entertainment, which runs the Taj Mahal, said management decided Wednesday it can no longer operate a money-losing property in the midst of a strike. On Thursday, the walkout by Local 54 of the Unite-HERE union will reach its 35th day, eclipsing the 34-day walkout the union staged against seven casinos in 2004.
"Currently the Taj is losing multi-millions a month, and now with this strike, we see no path to profitability," Rodio said. "Our directors cannot just allow the Taj to continue burning through tens of millions of dollars when the union has singlehandedly blocked any path to profitability. Unfortunately we've reached the point where we will have to close the Taj."
The central issue in the strike is restoration of health insurance and pension benefits that previous owners got a bankruptcy court judge to approve in Oct. 2014. Icahn offered to restore health insurance to Taj Mahal workers, but at a level less than what workers at the city's other seven casinos receive.
The union rejected that offer.
Donald Trump once owned three Atlantic City casinos, but cut most ties with the city by 2009. Having lost ownership of the company to bondholders in a previous bankruptcy, Trump resigned as chairman of Trump Entertainment Resorts, retaining a 10 percent stake in return for the use of his name. That interest was wiped out in bankruptcy court when Icahn took over in March.
President and CEO of Tropicana Entertainment Inc. Tony Rodio, released the following statement:
“Icahn Enterprises saved the Tropicana, and to date has lost almost $100 million trying to save the Taj when no other party, including the prior equity owners who put it into its recent bankruptcy, was willing to invest even one dollar to save it. Currently the Taj is losing multi-millions a month, and now with this strike, we see no path to profitability. It is one thing for a board to decide to invest tens of millions of dollars in a money losing business when they have a turn-around plan. But, the Taj Board and the Icahn Enterprises Board have fiduciary duties to shareholders and our directors cannot just allow the Taj to continue burning through tens of millions of dollars when the Union has single handedly blocked any path to profitability. Even if the Union accepted what we previously offered, which included the UniteHere healthcare plan we were led to believe they wanted, we would still be losing significant amounts each month, but at least there would be hope. Unfortunately, we’ve reached the point where we will have to close the Taj after Labor Day weekend and intend to send WARN notices before this weekend.”
Mayor Don Guardian released a statement following the announcement of the closing of the Trump’s Taj Mahal:
"It's unfortunate and disappointing that no resolution was found to keep the Taj Mahal open with the hopes of making it profitable again. My thoughts and prayers are with the hard working men and women who will be losing their jobs after Labor Day. Although these are still tough economic times, Atlantic City has been resilient for over 160 years and we will continue to do so, as we rise to meet any challenge ahead of us.""