Judge OKs CRDA contribution to tunnel project

Wednesday, May 14, 1997 | 11:59 a.m.

In a blow to Donald Trump, Superior Court Judge Richard Williams said the state Casino Reinvestment Development Authority's participation in the tunnel project does not violate the state constitution.

Trump vowed to appeal.

Mirage Resorts Inc. chairman Stephen A. Wynn, who is seeking construction of the tunnel as a condition of his company's plan to build a lavish $750 million casino resort in the marina district, hailed the decision.

He called Trump's ongoing fight "an unrelenting, reckless and vicious campaign" aimed at stifling new competition.

The tunnel's most high-profile supporter, Gov. Christie Whitman, also took a jab at Trump. Told during a news conference about the ruling, she said: "We won the CRDA case, so Donald Trump is oh-for-two. I guess oh-for-three if Marla's leaving him."

Earlier this month, a federal judge dismissed Trump's suit to block the tunnel, saying it should be heard in state court.

Trump's lawyers argued last week that the use of state casino revenue for the tunnel, hotel room additions by the casinos and other redevelopment projects goes against the wishes of New Jersey voters, who approved casino gambling believing the proceeds would go to senior citizens and disabled people.

Casinos pay the state 8 percent of their annual gross revenue, with the money going to the Casino Revenue Fund to benefit elderly residents and the disabled.

In addition, they pay 1.25 percent of their gross revenue to the CRDA for state-approved projects - in Atlantic City and elsewhere - that benefit the public.

Trump had contended that the 1.25 percent tax was being used illegally by the CRDA, which plans to sell $65 million in bonds to help finance the tunnel.

Williams disagreed.

"The purpose of the alternative tax was to provide an incentive for capital investment in order to revitalize Atlantic City. That purpose, as has been recognized previously, was one of the fundamental underpinnings of the casino gambling amendment. There was no intent to divert any revenue from senior and disabled citizens. Rather, the Legislature designed the provision to ensure that its goals of aid to senior and disabled citizens and urban redevelopment would complement one another," Williams said in the 31-page decision.

He also ruled that CRDA's use of revenue from the $2-per-car parking fee at casino parking garages for infrastructure improvements in Atlantic City was constitutional.

"As we have stated from the outset, this issue will ultimately be decided by the New Jersey Supreme Court," Trump Hotels and Casino Resorts Inc. said in a prepared statement.

"A cursory review of Judge Williams' opinion reaffirms our confidence that the court will ultimately rule in our favor," the company said. Trump himself did not return telephone calls seeking comment.

Had Williams ruled in favor of Trump, it could have brought the tunnel plan and construction on a $100 million "corridor project" to a halt. That project includes a new convention center, hotel and roads between the foot of the Atlantic City Expressway and the Boardwalk.

"The irony of this is that we've spent two months litigating so that we can complete a road project to the Trump property," said James Kennedy, executive director of the CRDA.

Wynn, Trump's bitter rival, accused Trump and Hilton Hotels Corp. gambling chief Arthur Goldberg of maligning public officials as part of a campaign to keep Mirage out of New Jersey.

"In this unyielding campaign, Mr. Trump and Mr. Goldberg have resorted to any and all means, regardless of the consequences, and have recklessly used the significant resources of their respective companies ... to wantonly disregard the rights of our company and others," Wynn said.

"For this inexcusable and inappropriate conduct, there will most definitely be a day of reckoning," he said. He also called on the companies' boards of directors to "rein in" Trump and Goldberg.

Hilton Hotels Corp. spokesman Marc Grossman said Mirage should mind its own business.

"Our board and our shareholders believe we're running our business just great," he said.

Trump spokesman Alan Marcus called the statement "the rantings of a lunatic."

"Nobody's stopping Steve Wynn from coming. The issue is on what basis he comes. It has nothing to do with competition. It has nothing to do with not wanting additional casinos in Atlantic City. The state shouldn't be giving him hundreds of millions of dollars in free land, transportation, infrastructure subsidies. That's the issue," Marcus said.