ATLANTIC CITY — A lender has filed a foreclosure lawsuit seeking to force the sale of a portion of Atlantic City's Showboat Resort, alleging developer Bart Blatstein defaulted on a commercial mortgage totaling nearly $48.5 million.
The complaint, filed June 30 in Atlantic County Superior Court by Computershare Trust Co., seeks to recover an outstanding balance of approximately $47 million through a sheriff's sale of part of the Boardwalk property.
The foreclosure action does not mean the entire Showboat Resort is being sold or that the hotel, Lucky Snake Arcade or Island Waterpark will immediately close. Rather, it begins what could become a lengthy legal process while the parties attempt to resolve the debt.
According to court filings, the lender claims Showboat's ownership has failed to make required payments on the mortgage for more than a year and is seeking permission to auction part of the property to satisfy the debt. The portion named in the lawsuit reportedly includes at least 475 hotel rooms, the Lucky Snake Arcade, and the property's parking garage.
Blatstein told the Philadelphia Business Journal he is negotiating to restructure the loan and expects the resort to remain open while those discussions continue.
The lawsuit marks the latest financial challenge involving the Showboat property, which has undergone a dramatic transformation since Blatstein purchased the former casino hotel from Stockton University in 2016.
After the casino closed in 2014, Blatstein repositioned the property as a family-friendly destination centered around non-gaming attractions. Those investments include the Lucky Snake Arcade, one of the largest arcades on the East Coast, and the Island Waterpark, an indoor attraction that has become a centerpiece of the resort's redevelopment.
The property has also received significant public and private investment in recent years, including financing for energy improvements and state support tied to redevelopment efforts.
The foreclosure complaint also comes after several contractors have pursued legal action over unpaid work connected to improvements at the property. Court records show Showboat ownership has previously faced lawsuits involving construction and renovation projects, though some of those disputes have since been resolved.
If the foreclosure action proceeds, a judge would first need to rule in favor of the lender before any sheriff's sale could take place. Such cases often involve negotiations, refinancing efforts or restructuring agreements before a property is ultimately sold.
For now, Showboat continues normal operations while the foreclosure case moves through the court system.
About the Author
Karen Johnson
With over 30 years of news experience in major markets like Los Angeles, Denver, and Columbus, Karen now covers our area for South Jersey NewsBeat. She also brings her articulate and conversational news delivery to WOND radio listeners every weekday. Her background includes work with the NBC Radio Network, and she thrives in fast-paced news environments.
