Penthouse Boardwalk Hotel and Casino

Penthouse Boardwalk Hotel and Casino was an ambitious but ultimately unsuccessful Atlantic City hotel and casino development proposed by Boardwalk Properties, Inc., a wholly owned subsidiary of Penthouse International, the publishing company associated with Penthouse magazine. Planned during the late 1970s, the project occupied a large block bounded by the Boardwalk, Pacific Avenue, South Missouri Avenue, and Columbia Place. It was conceived during a period when Atlantic City was attempting to revive its tourism economy through legalized casino gambling and attract large-scale private investment to the Boardwalk. Boardwalk Properties acquired the Four Seasons Motel and the Holiday Inn on the site in early 1978 and sought to assemble the remaining properties. The effort was obstructed by Vera Coking, a homeowner who declined to sell her house. Rather than abandoning the plan, the developers began construction around the property. Work started in 1978, but only a four-story steel framework was completed before construction stopped in 1980. The unfinished structure remained visible for years, becoming a prominent symbol of the project's collapse. It was later incorporated into the visual background of the film Atlantic City. The development faced several overlapping problems. Its financing assumptions proved unreliable, and the project depended in part on revenue from Bob Guccione's film Caligula, whose commercial performance did not meet expectations. The developers also encountered prolonged difficulties obtaining a New Jersey casino license. Regulatory scrutiny reflected both the company's earlier casino ventures and concerns surrounding proposed property transactions in Atlantic City. Penthouse's previous gaming operations included the Penthouse Club in London, whose license was revoked in 1971, and the Penthouse Adriatic Club in what is now Croatia, which entered bankruptcy and closed in 1973. The Atlantic City project became entangled in litigation and controversy. During the Abscam investigation, an FBI informant approached Guccione with a purported investment and an alleged proposal to pay gaming officials for assistance with licensing. Guccione rejected the proposed payment and later sued the federal government, but did not prevail. Other lawsuits concerned financing, alleged sexual harassment connected with attempts to secure casino backing, a disputed lending arrangement, a possible sale of the property to the Sands, and later dealings involving Donald Trump. These legal and regulatory complications further weakened the project's prospects. The casino never opened, and no gaming license was issued. In 1993, Donald Trump acquired the property. He renovated the existing Holiday Inn building and made it part of the Trump Plaza Hotel and Casino as the East Tower, while the remaining unfinished structure was demolished. Guccione later announced another Atlantic City casino proposal involving the Mayflower Hotel site in 1997, but that plan also failed to materialize. His remaining Atlantic City interests were sold in 2001 in connection with delinquent loans. The Penthouse Boardwalk project is therefore best understood not as an operating hospitality brand, but as an abandoned casino development associated with Penthouse International's unsuccessful attempt to enter Atlantic City's regulated gaming market.

Penthouse Boardwalk Hotel and Casino was conceived in the late 1970s as Penthouse International's principal attempt to enter Atlantic City's newly developing casino-resort industry. The project was to be developed by Boardwalk Properties, Inc., a wholly owned subsidiary of Penthouse International, the publisher of Penthouse magazine. The proposed site occupied a block near the Boardwalk and was bounded by Pacific Avenue, South Missouri Avenue, Columbia Place, and the Boardwalk. Boardwalk Properties acquired the Four Seasons Motel and the Holiday Inn in early 1978. It intended to consolidate the entire block, but Vera Coking, whose house stood within the proposed footprint, refused to sell. The company proceeded with construction around her property. Initial work began in 1978, and Guccione publicly expressed confidence that licensing would be obtained quickly and that the casino would open within the same year. Those predictions proved unrealistic. The development's financing was unstable. One intended source of capital was the box-office revenue from Caligula, Guccione's expensive film production, but the film did not produce the anticipated returns. The company therefore pursued alternative financing while simultaneously attempting to satisfy New Jersey gaming regulators. The project was also judged in the context of Penthouse's earlier casino activities. A Penthouse Club casino in London lost its license in 1971, while the Penthouse Adriatic Club in what is now Croatia entered bankruptcy and closed in 1973. Regulatory and legal problems accumulated. Authorities examined the company's proposed Atlantic City transactions, including a contemplated purchase of the Mayflower Hotel from a person described as connected to the Philadelphia crime family. During the Abscam sting, FBI informant Melvin Weinberg represented that an Arab investor could provide substantial capital if the project first secured a casino license, and sought an alleged payment to gaming officials. Guccione refused. After the operation became public, he sued the federal government but was unsuccessful. The financing campaign also generated private litigation. A former Penthouse Pet of the Year obtained a substantial jury verdict in a sexual-harassment case involving alleged conduct connected with efforts to arrange casino financing, although appellate proceedings removed most of the punitive damages. Penthouse later obtained a large trial judgment against Dominion Federal Savings & Loan over an alleged financing commitment, but that judgment was overturned. In 1989, Penthouse sued Pratt Hotel Corporation, the owner of the Sands Atlantic City, over an alleged failure to complete a transaction involving the property. Related litigation raised allegations that a Penthouse executive threatened to publish information about Donald Trump's personal life while Trump opposed the proposed sale. Construction stopped in 1980 because the project could not resolve its financing and licensing obstacles. Only a four-story steel framework had been completed. The abandoned structure rusted for years and became associated with Atlantic City's troubled casino-building era; it also appeared in a scene in the film Atlantic City. In 1993, Donald Trump acquired the property. He retained and renovated the Holiday Inn building as the Trump Plaza Hotel and Casino East Tower and demolished the rest of the unfinished development. Guccione continued to express interest in Atlantic City. In 1997 he proposed transforming the Mayflower Hotel property into another casino, but the plan went nowhere. He later pursued a resort project with Ramada Inn near Atlantic City's entrance, but that property was sold in 2001 to address delinquent loans. His remaining Mayflower-site interest was sold at the same time. No Penthouse casino ever opened, and the brand remains a defunct proposed property rather than an operating hotel or gaming company.

• 2001

  Remaining Atlantic City interests sold

  [1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Guccione's remaining Atlantic City property interests were sold in connection with delinquent loans.

• 1993

  Property acquired by Donald Trump

  [1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Trump acquired the site, reused the Holiday Inn building for Trump Plaza, and removed the unfinished framework.

• 1980

  Construction suspended

  [1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Work stopped after the project encountered major financing and gaming-license difficulties.

• 1978

  Development site assembled

  [1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Boardwalk Properties acquired the Four Seasons Motel and Holiday Inn and began pursuing a larger Atlantic City development block.

• 1978

  Construction starts

  [1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Construction began around the house of Vera Coking, who declined to sell her property within the planned site.

A proposed luxury-oriented Atlantic City hotel and casino linking the Penthouse publishing brand with the emerging casino-resort market of late-1970s New Jersey.

• Casino resort development

  Penthouse Boardwalk Hotel and Casino

  The proposed flagship property was intended to combine hotel accommodation and casino gaming on an Atlantic City Boardwalk site. Although construction reached a visible steel-frame stage, the hotel-casino was never completed, opened, or granted a New Jersey casino license.

• Abscam-related licensing approach

  An FBI informant attempted to induce Guccione to make an alleged payment to New Jersey gaming officials in connection with obtaining a casino license. Guccione rejected the proposal, later sued the federal government, and lost.

  Source

• Regulatory scrutiny and casino-license difficulties

  The project faced prolonged gaming-regulatory scrutiny, including questions related to Penthouse's prior casino operations and a proposed Atlantic City property transaction.

  Source

• Financing-related sexual-harassment litigation

  A former Penthouse model won a substantial jury verdict against Penthouse and Guccione over alleged sexual harassment connected in part with efforts to secure casino financing. Appellate review disallowed most of the punitive damages.

  Source

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• 1993

  Sale of the unfinished property to Donald TrumpM&A

  Background

  The Penthouse development had remained incomplete for years after construction stopped.

  Action taken

  Donald Trump acquired the property and redeveloped portions of it as part of Trump Plaza Hotel and Casino.

  Aftermath

  The Holiday Inn building became the Trump Plaza East Tower, while the remaining unfinished structure was demolished.

  Source

• 1978

  Use Penthouse publishing capital and brand identity to enter casino gamingStrategy

  Background

  Penthouse International sought to expand beyond publishing into Atlantic City's newly legalized casino-resort market.

  Action taken

  It used Boardwalk Properties to acquire hotel and motel assets and begin developing a branded hotel-casino.

  Aftermath

  The strategy was undermined by weak financing, regulatory obstacles, litigation, and the absence of a gaming license.

  Source

• 2001

  Atlantic City properties sold to address delinquent loans[1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  M&A

  Guccione's remaining Atlantic City interests, including the Mayflower site, were sold in connection with delinquent loans.

• 1997

  A later Mayflower casino proposal fails to proceed[1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Other

  Guccione announced plans to develop the Mayflower Hotel property as another casino project, but the proposal did not become an operating resort.

• 1993

  Donald Trump acquires the unfinished casino site[1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  M&A · Other

  Donald Trump acquired the property, renovated the Holiday Inn building for the Trump Plaza complex, and demolished the remaining unfinished structure.

• 1980

  Construction halted amid financing and licensing problems[1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Bankruptcy · Other

  Work stopped after only a four-story steel framework had been erected, as the project struggled to secure financing and a New Jersey gaming license.

• 1978

  Construction begins on the proposed Penthouse Boardwalk casino[1]Penthouse Boardwalk Hotel and Casinoen.wikipedia.org

  Other

  Boardwalk Properties began construction on the planned Atlantic City hotel and casino after acquiring the Four Seasons Motel and Holiday Inn properties on the development block.

1. 1Penthouse Boardwalk Hotel and Casinoen.wikipedia.org