SOS: Showboat Deal Elaborated

By the Numbers

Bought For
$0
Million Dollars
Operating Expenses are
$0
Million Dollars
Current Sale Price is
$0
Million Dollars (pending closing)

The Timeline

  • Covenant between Showboat and Trump Taj Mahal requires the Showboat to be operated as a first-class casino hotel
  • Nov. 2014 – Deed restriction placed on the site by Caesars allows no gaming on the site for 10 years
  • Nov. 2014 – Stockton learned about the 1988 covenant. Caesars Entertainment Operating Co (CEOC) then took responsibility for resolving the covenant and for compensating Stockton for any fees.
  • Dec. 1, 2014 – President Herman Saatkamp and Stockton officials were comparing the prices of Showboat and the Atlantic Club. The Atlantic Club would have cost $23 million while the Showboat cost $18 million.
  • Dec. 3, 2014 – Showboat purchase discussed in a Board of Trustees closed session
  • Dec. 9, 2014 – A special Board of Trustees meeting held
  • Dec. 12, 2014 – Sale of Showboat to Stockton for $18 million dollars
  • Jan. 2015 – CEOC and Showboat file for bankruptcy
  • March 13, 2015 – Trump notified Stockton that it did not agree to release the covenant and intended to enforce it
  • March 19, 2015 – Stockton notified Caesars of Trump’s enforcement and demanded that the casino company fulfill its obligations
  • April 3, 2015– Agreement by Glenn Straub and Stockton for 90 days to finalize or cancel the sale of Showboat to Straub
  • April 23, 2015 – Stockton President Herman Saatkamp submitted resignation and began medical leave
  • April 28, 2015 – Court documents show Stockton attempted to finalize the sale of showboat to Glenn Straub on this date. Straub refused.
  • May 26, 2015 – Stockton University filed a legal claim against CEOC and Showboat Atlantic City over the university’s purchase
  • May 22, 2015 – Stockton’s credit rating is downgraded from A2 to A3 with negative outlook by Moody’s Investor Services
  • May 26, 2015 – Stockton University filed a legal claim against CEOC and Showboat Atlantic City over the university’s purchase, meeting the deadline for bankruptcy court
  • June 22, 2015 – Stockton sent a letter to Straub’s attorney listing unproductive conversations and meetings with Trump and Caesar officials
  • July 1, 2015 – Straub filed complaint seeking to force Stockton to resolve the issues on the property before he purchases the site
  • July 2, 2015 – Stockton notified Straub that because there is no settlement, the university is terminating the contract
  • July 10, 2015 – Stockton filed complaint in Atlantic City Superior Court. University states in complaint that if it cannot sell soon, it will have to end security and utility services at Showboat
  • July 12, 2015 – Superior Court Judge Julio Mendez allowed Stockton to begin marketing the Showboat but they must notify Straub if another buyer is found
  • July 12, 2015 – Straub expressed he still has interest in the Showboat but wants the deed issues resolved. He claims Stockton made no effort to fix the problems.
  • September 15, 2015 – An independent report on the Showboat purchase done by law firm Gibbons P.C. was released
  • September 18, 2015 – Stockton announced Tower Investments, Inc. will purchase the Showboat for $22 million
  • November 9, 2015 – The date set by the deal with Tower Investments, Inc. to close the sale

Community Answers

  • “All parties, including the city officials of Atlantic City, with Stockton being the most at fault for thinking the original clause would be solved in the first place.” – Current Student
  • “Herman Saatkampt” – three answers
  • “There are a lot of different parties playing power games here” – Faculty
  • “Many complicit parties.” – Alumni
  • “AC gov” – Alumni
33% of respondents to this question reported that their opinion of the purchase had not changed. Some indicated that they had a negative opinion of the purchase since the beginning and that did not change.

  • “Yes, it has become extremely negative. This was mishandled at the highest levels, and Stockton is quite literally paying the price for this mistake.” – Current Student
  • “I am confused on why they purchased the showboat in the first place if they knew since the beginning that they was an agreement that stated that it had to remain a casino. They should have done their research first.” – Current Student
  • “Yes, because of the lack of research conducted on behalf of Stockton University with regards to the property itself.” – Community Member
  • “Yes. At first I thought purchasing a location in Atlantic City would do the school and AC good, but now I do not believe we have the funding to try and purchase another establishment. We can barely take care of the students attending Stockton now.” – Current Student
  • “Hindsight is 20/20. Purchase should of been properly vetted.” – Alumni
  • “I think it has been detrimental to Stockton’s image and has cost Stockton money it could have used elsewhere.” – Current Student
  • “They need to be more aware.” – Current Student
  • “Saatkamp’s fumble made it really obvious that the school, especially the Board of Trustees, is only interested in furthering Stockton as a business instead of taking into account student needs and wants.” – Current Student
  • “Poor management decisions reflect my view of the quality of education offered.” – Parent, Family Member, Guardian or Friend of Current Student
  • “No. Still a proud alumni of Stockton State College.” – Alumni
  • “I used to think Stockton was a genuinely nice place but then I learned that there are egotistical/incompetent workers within every system. Therefore, I should not generalize.” – Current Student
  • “I started here in 2011, and I’m happy to leave. I feel that the school I was sold on at an open house and the current institution aren’t even related. I want less talk of profitability and more interest in student growth and development. Visiting friends at schools like SUNY Purchase and Bard made me feel like I made a very poor choice and the recent fumbles of our narcissist ex-president sealed it.” – Current Student
  • “The education and finances of students, staff, and outside donors were at clear risk when the Showboat deal was made. The contract was clear in stating that the property could not be anything but a casino, and that was outright ignored (I hope not) or played down. Anyone who read it should have saw that. Even with the hope that Caesars would have taken care of the clause, Stockton should have never jumped into such a risky investment. If lawyers said to go for it, they should not be hired for business work for the university again. If the investment were not bad enough, the fact that the administration decided to expand outside of Galloway without consulting students and faculty is quite disappointing. Finally, the communication (even currently with the new administration) has been extremely, extremely poor. As a student, I feel I have a right to know what my tuition is going to- and right now, I have absolutely no idea. I’ve learned more through reading the Argo and outside newspapers than from school administrators, and that almost makes me angrier than the misjudgment of buying the Showboat in the first place.” – Current Student
  • “I believe we should still try to establish a University in AC because it will open up the city to a younger crowd and get more people to attend city events, restaurants, shops and more.” – Current Student
  • “I was happy to see the outreach Stockton attempted into Atlantic City proper, and I hope they find a fully legal way to establish themselves as a top-tier University option to the City. AC’s economy could use whatever help it can get, and the students could use the motivation a nearby accredited University could provide.” – Community Member
  • “No one chooses to go to Stockton to live in Atlantic city.” – Current Student
  • “I think stockton should have made sure everything was set and stone before everything was bought. I loved the idea!” – Current Student
  • “Corporate greed on Taj Mahals part is the biggest factor. Do they really think that if underage gamblers want to try and gamble at their casino that it doesn’t make any difference if they are next door or 15 minutes away? That’s why they have security personnel! That’s like saying I hit the cow with my car because it wouldn’t get out of the way – when you saw it in the middle of the road and could have just steered around it.” – Parent, Family Member, Guardian or Friend of Current Student
  • “The Showboat purchase was a fiasco. Pure greed from parties other then Stockton. Thank goodness that Harvey is now President of Stockton. He salvaged our reputation. That is all.” – Alumni
  • “Atlantic City needs one or more stable industries to be able sustain itself now that it has lost its monopoly on the gambling industry. Incorporating a University into AC would certainly help bring jobs and stability to the residents there. However, Stockton lawyers and administrators need to be more realistic. Imagine if Saatkamp had aimed to open the AC campus in Fall 2017 instead of a year earlier! Much of the turmoil and doubt about class locations and housing would have been completely avoided. I hope they learned there lesson.” – Current Student
  • “It’s probably a good idea to expand to Atlantic City; it would be difficult to further expand at main campus, and it could really improve the quality of life in A.C. As far as I’ve heard, however, Harvey is pretty intent on selling the showboat, which I can’t really blame him for. It’s going to be a tough decision either way, I just hope Harvey becomes the start of a new kind of Stockton administrator that is more open and honest with the community.” – Current Student
  • “Food for thought i’m pretty sure the housing fee over the course of two years would have paid it back Stockton’s price for the boat. Some 3rd party should have just bought it.” – Alumni
  • “Casino industry is trash, why are we throwing state/stockton money at a money trap.” – Alumni
  • “If Stockton wanted to build a campus in Atlantic City, they should have done so carefully and considered what they were doing.” – Alumni
  • “I feel that this was a terrible idea. Atlantic City is an area filled with crime, drugs, prostitution and gambling. It would be extremely irresponsible to send any students there due to the safety issues present in the city, and how many illicit activities are nearby. I personally do not understand what parent would allow their child to attend school on a campus in such an area. The bragging rights of an oceanfront dorm are eclipsed by the immense and troublesome issues present in that city, that truly do not make it safe for students. One of the biggest issues brought up was how it would affect the economy of Atlantic City now that we aren’t establishing a presence there. It seems as though Atlantic City wanted us to fix their problems, and that we as a school were intent on fixing those problems for them. In reality, this should not be the responsibility of Stockton. We have issues in Galloway. A master plan has been developed with parking relief for commuters, and such a garage has yet to be announced or mentioned anywhere. Housing 1 is filled with mold, roaches, and other bugs. Housing 5, despite its young age is already starting to appear damaged and worn out. Our primary campus is housing students in hotels off campus, which in my opinion, is completely unacceptable. Yet, we have no problem trying to build an entirely new campus in Atlantic City, in which the students were not allowed to voice any opposition to the project in the distributed survey. It seems as though Stockton wants to move into this city, and the thoughts and voices of Stockton will be silenced in an attempt to move into this area, as it seems dead set on making this new campus a reality, regardless of what anyone thinks.” – Current Student