Sarlo Bill Requiring Notification of College Governing Board for Major Property Purchases Becomes Law

Legislation Spurred By Ill-Fated Stockton-Showboat Deal

TRENTON – Legislation authored by Senator Paul Sarlo that would require the notification of the college governing board and general counsel of any planned property purchase was signed into law today. The law, S-793, was written in response to the ill-fated $18 million purchase of the former Showboat Casino in Atlantic City by Stockton University.

“We can’t allow these types of financial blunders to happen again,” said Senator Sarlo. “This is a state university using public funds. The investigation showed that this deal was finalized without informing Stockton’s board of governors or doing the needed research for a major purchase such as this.”

The former president of Stockton, who executed the agreement, was aware of the decades-old covenant that prevented the Showboat from being used as a satellite campus but went through with the transaction anyway. The purchase agreement left the public university burdened with a large facility it could not use and required 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.

Senator Sarlo said that the fate of the property has an impact on the local economy as well as Stockton’s finances and the state’s taxpayers.

The law requires the president or any other officer or employee of a public institution of higher education notify the governing board and general counsel before taking any action on behalf of the institution for the purchase of property that is not within a five-mile radius of one of the existing campuses of the institution. The bill would also require the governing board to submit a report to the Governor, the Legislature, the Secretary of Higher Education, and the State Comptroller on the planned purchases. The report would be filed within five days following the submission of the institution’s initial offer for the purchase of the property.