Senator Paul Sarlo (D-36), the chairman of the Senate Budget and Appropriations Committee, announced today that he will conduct a committee hearing to follow up on the investigation of the failed $18 million purchase of the former Showboat Casino in Atlantic City by Stockton University. Sarlo said he will call Stockton’s acting president Harvey Kesselman and representatives of the Gibbons law firm to testify. Gibbons conducted an independent investigation of the ill-fated deal, identifying a series of blunders allowing the costly purchase to be finalized.
“The investigation identified a series of bad risks and poor judgement that allowed a bad deal to go through,” said Sarlo. “I want to get more information on how and why this happened and what actions need to be taken to prevent anything like this from happening again at Stockton or at any other state university. The report provides more evidence that needs to be further explored.”
The senator said he will conduct the hearing on November 9. Mr. Kesselman already testified before the panel on April 30, two days after stepping in as acting president. This would be a follow-up hearing, Sarlo said.
“The fact that the former president and others were aware of the decades-old covenant that prevented the Showboat from being used as a satellite campus is one of the most glaring mistakes that needs to be better explained,” said Sarlo. “I also want to learn more about the attempts to resolve the dispute and why the deal wasn’t cancelled when more of the people involved were made aware of the covenant.”
The failed transaction left the public university burdened with a large facility it could not use and requires an estimated $400,000 a month in maintenance costs. It also left an empty property in Atlantic City at a time of severe financial problems for the city and its residents.
Sarlo said he also wants to get an update on the status of the facility and its proposed sale and use, saying that the fate of the property has an impact on the local economy as well as Stockton’s finances and the state’s taxpayers.