Showboat Lender Says Blatstein Chose Not to Pay a $48.5 Million Loan

Computershare Trust Company, N.A., acting as trustee for a commercial mortgage-backed securities (CMBS) trust, has filed a reply brief in the New Jersey Superior Court, Chancery Division (Atlantic County), demanding the immediate appointment of a receiver and the advancement of foreclosure proceedings against Showboat Properties LLC and developer Bart Blatstein.

The plaintiff is Computershare Trust Company, acting as trustee for a mortgage trust that bought the loan from Barclays. The Showboat is a boardwalk hotel with no casino, which makes it an odd player in New Jersey’s casino market.

Seventeen Months Without a Payment

The foreclosure complaint itself was filed on June 30 against Showboat Properties LLC and Blatstein. The September filing lists what the lender calls admitted or undisputed defaults: no debt-service payments since April 2025, a state tax judgment of $401,768.99 with $223,298.62 still outstanding, open construction liens, unpaid insurance premiums and a room renovation project that missed its deadline.

The lender says it was forced to advance $969,596 to pay the premiums itself after the borrower failed to keep the required policies in place. Blatstein’s side told the court that its general liability coverage never lapsed. The lender’s reply is that it only stayed in force because the trust paid for it.

The loan also required the room project to be finished by June 1, 2023, and the deadline was pushed to October 31, 2023. By the borrower’s own admission, only 50% of the tower rooms were done when that second date passed.

Busy Hotel, Unpaid Lender

Blatstein’s companies argue that the property is doing fine. According to the lender’s brief, they told the court the Showboat served about 1.2 million hotel guests, customers, event attendees and arcade patrons over the past year and employs roughly 500 direct and indirect staff. They called the unpaid taxes and liens “limited” or “being addressed.”

The trust’s lawyers at Duane Morris, in a brief signed by attorney Sarah Fehm Stewart, turned that back on them: “If the Property is serving over a million patrons annually, then Borrower’s failure to pay their Loan is not a matter of inability, it is a matter of choice.”

Blatstein’s side has floated a softer option, a rent receiver only, or court-ordered status reports, proof of insurance and inspection access. The lender says it wants a full receiver, and at the very least a rent receiver plus that oversight. The court hasn’t ruled. When the complaint first surfaced, Blatstein told the Philadelphia Business Journal he was negotiating to restructure the debt and that the Showboat would stay open.

From Shuttered Casino to Family Resort

The Showboat was a Mardi Gras-themed casino for 27 years. Caesars Entertainment shut it in 2014, closing a still-profitable property to cut the number of casinos in a city that was losing revenue, NPR reported. It was one of three Atlantic City casinos closing within two weeks that year.

Stockton University bought it from Caesars for $18 million in December 2014, hoping to build a campus, but competing deed restrictions sank the plan. One of them, placed by Caesars, barred the building from ever being used as a casino again. Blatstein completed a $23 million purchase in January 2016, the Associated Press reported.

How the Loan Was Built

The debt dates from October 2022. A Barclays securities filing shows the $48.5 million whole loan carried a 7.795% interest rate, paid off about $20.3 million of existing debt and returned about $12.6 million of equity to the sponsor. The collateral is the 475-key Bourbon Tower, the Lucky Snake Arcade and the parking garage, and the filing states plainly that “There is no casino at the Showboat Hotel Property.”

Part of the money was set aside for upgrades ahead of a $100 million waterpark next door. The Island Waterpark opened on July 4, 2023, after a state permitting delay, the Philadelphia Inquirer reported. Contractors have taken Blatstein to court too, and in 2025 a judge ordered him and his construction company to pay Lee-Way Electrical $532,933.35.

Atlantic City’s Floors Keep Slipping

The fight lands in a soft stretch for the buildings that still have casinos. The Division of Gaming Enforcement says the nine casino hotels won $294.9 million in August, down 5.5% from $311.9 million a year earlier. Casino win is the money the house keeps after paying out winners.

Online went the other way. Internet gaming win from the casinos and their partners rose 4.4% to $259.3 million, part of the online casino growth seen in three states that month. Through August, New Jersey’s year-to-date internet gaming win reached $2.13 billion, ahead of the $2.01 billion the nine casino floors won.