An Assembly panel on Thursday approved legislation sponsored by Assemblyman Vince Mazzeo that would eliminate repressive deed restrictions on properties owned by public entities in Atlantic City that have prevented places like the former Showboat Casino from being redeveloped into a new use.
The bill stems from the problems that arose late last year when Stockton University purchased the Showboat with the intent of turning it into a satellite campus, but it was later discovered that conflicting deed restriction existed between Caesars Entertainment and nearby Trump Taj Mahal, which prevented the Showboat site from being developed into anything other than a casino.
“The dueling deed restrictions placed on Stockton’s purchase of the Showboat has cost the university and its students millions of dollars. This legislation should be the final piece of the puzzle to let Stockton University finally resolve its sale of the Showboat and move on to building its new island campus, the Atlantic City Gateway Project in the Chelsea neighborhood,” said Mazzeo (D-Atlantic). “Public entities should not be subject to these frivolous deed restrictions. If we’re going to turn Atlantic City into a diverse, family-friendly resort destination, we have to remove these impediments to redevelopment.”
The bill (A-4731) stipulates that every oral agreement or provision in a written instrument, no matter when entered into or made, relating to public entities who own real property now within the boundaries of the Atlantic City Tourism District, may be enforced only among the original parties to the agreement and must not run with the land.
Furthermore, whenever a public entity holds title or a leasehold interest in a property within the boundaries of the Atlantic City Tourism District, and the property is purportedly subject to a provision which forbids or restricts the use or occupancy of the property or the nature, including the aesthetics, or any improvements thereon, the restrictions would be void and unenforceable as against public policy.
“Atlantic City needs every resource at its disposal to weather this storm and come out on top,” added Mazzeo. “This simple policy change will help us move forward with the redevelopment of a major asset within the city and also eliminate any future obstacles of this kind.”
Any successor in interest to the public entity may buy, lease, or take assignment of the property without regard to the purported restrictions, including any provisions requiring a price for the release of the restrictions.
This bill also stipulates that, whenever a public entity holds the title or an interest in real property located within the boundaries of the Atlantic City Tourism District, the real property would be considered to be devoted to a public use in accordance with state law and not subject to taxation, if the public entity:
1) submits a detailed plan for the public use of the property to the Casino Reinvestment Development Authority and the municipal tax assessor within 18 months of acquiring its interest; or
2) sells, assigns, or transfers its interest in the property within 18 months of acquiring that interest. If the real property is sold, assigned, or transferred to a person or entity that is not exempt from taxation, then the real property must be subject to taxation under state law commencing on the day next following the date of sale, assignment, or transfer.
The bill was released by the Assembly Appropriations Committee.