The Trump Taj Mahal, a popular casino hotel in Atlantic City, has closed its doors 26 years after it was opened by Republican U.S. presidential candidate Donald Trump, following years of losses.
The closure, which was announced by owner Carl Icahn on Monday, had been widely expected. The casino hotel’s management had announced in August that it would close the business amid labor and profitability challenges.
The shutdown increased to five the number of casinos that have gone out of business in Atlantic City, as it becomes less and less popular as a gaming, resort destination.
The casino hotel’s billionaire owner said in a statement that the business lost nearly $350 million in “just a few short years.” It wasn’t only the losses that brought the Trump Taj Mahal to its somewhat sudden demise, though. A breakdown in negotiations with union workers also contributed to the closure, which will cost about 3,000 employees their jobs.
The workers’ union called about 1,000 employees at the hotel out on a strike on July 1. It was fighting for healthcare and pension benefits for the workers, who included bartenders, cooks, and housekeepers. The last offer made to the union by Icahn reportedly included medical benefits, but it was rejected.
This left the billionaire investor friend of Trump with no other option than to close the Taj Mahal. He said keeping the casino open would have required more investments and result to more than $100 million in losses over the coming year.
The benefits requested by the union workers were reportedly removed in bankruptcy court.
The famous casino hotel was opened by Trump in 1990 after years of legal and financial issues and heavy debt financing. Covering more than 100,000 square feet, the Taj Mahal dubbed itself the “eighth wonder of the world.” It ranked among the world’s largest casinos at the time it was opened.
The Taj has been the subject of multiple bankruptcy filings since then. Trump lost ownership of the hotel in 2009 following the bankruptcy restructuring of his Trump Entertainment Resorts. The control of the operator company was taken over by Avenue Capital.
The restructured Trump Entertainment Resorts again filed for another bankruptcy protection in 2014. It became an Icahn Enterprises subsidiary after the legal proceedings were completed.
In August, Chief Executive Tony Rodio of Tropicana Entertainment Inc., the company which controls the Trump Taj Mahal on behalf of Icahn Enterprises, revealed in August that its billionaire owner had lost approximately $100 million since its acquisition after conclusion of bankruptcy proceedings in February.
The workers’ union had argued that many of the hotel’s workers saw “only 80 cents per hour in total raises” in the past 12 years, even when cost of living in the Atlantic City area rose by over 25 percent in that period.
The union said squabbles over labor issues between Icahn and the workers had cost the Taj Mahal around $150 million.
Atlantic City has witnessed strong out-of-state challenge to its reputation as a major East Coast gaming center. Deteriorating infrastructure has also not helped its fortunes. Trump Plaza Hotel, Revel, Snowboat Casino Hotel, and the Atlantic Club are some of the casinos that have closed shops here since 2014.