State Officials from a redevelopment agency in Atlantic City have preliminarily approved a $5.6m payment to billionaire investor Carl Icahn to assist in the demolition of part of the shuttered Trump Plaza casino in Atlantic City, New Jersey.
The Casino Reinvestment Development Authority approved Icahn’s request to use funds from an Investment Alternative Tax, or IAT, a 1.25% levy that all Atlantic City casinos are required to pay in addition to their state mandated 8% tax on gambling revenue.
Funds from the tax are intended to fund redevelopment projects in Atlantic City and the wider state of New Jersey; however state law was changed last year to redirect these funds to pay off Atlantic City’s spiralling debts.
Under the new law, any funds received by the state before the legislation changed are still eligible to be used for projects deemed beneficial to the city subject to approval. Robert Mulcahy III, chairman of the state agency, told the Washington Post that “We all feel the demolition of this tower is in the best interest of Atlantic City.
“It’s part of the gateway into the city. That land could be very valuable.”
The demolition will vacate several acres of oceanfront land, which is expected to draw the attention of major investors looking to purchase valuable real estate.
Atlantic City Mayor Don Guardian, who voted against the proposal to award the funds, voiced his disapproval of the decision, saying: “I agree this project needs to come down.”
“But why are they asking us for $5.6 million? You’re already responsible for the project closing and the loss of jobs and the suffering the city has gone through.”
No immediate comment on the decision was made by Carl Icahn or his company.