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AC Back in Business After Storm

November 19, 2012 02:11 PM ET | Nick DiUlio | Permanent Link

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Atlantic City is alive and well – and eager to dispel the notion that New Jersey’s entertainment capital had folded its hand in the wake of Superstorm Sandy.

In the early days after the October 29 storm, there was an impression that America’s Playground—along with its myriad attractions—had been devastated. Based on aerial photos of the battered Boardwalk, it appeared that the once-iconic stretch of shops and eateries and casinos had been wiped away. Chunks of wood and disengaged pylons littered the landscape. On ABC, George Stephanopoulous said of the Boardwalk: “One of the most famous landmarks in the country, so much of it destroyed.”

But what we were really looking at was the small section of Boardwalk that ran along a residential stretch of the Absecon Inlet, north of the oceanfront casinos. And while the damage was significant, it wasn’t anything entirely unexpected. That stretch of Boardwalk has long been in disrepair and was due for demolition.

“There were a lot of erroneous reports out there after Sandy, not the least of which being that the Boardwalk was completely destroyed,” says Jeff Guaracino, spokesman for the non-profit Atlantic City Alliance. “Atlantic City was very fortunate. In our tourism areas, we were relatively undamaged by the storm.”

While most of its casinos and iconic structures were spared, AC’s image took a significant hit. The general perception was that Atlantic City had been ravaged beyond recognition, and there was no telling when things would get back to normal.

Of course, there was an immediate impact. The casinos remained closed for five days because of the storm, costing a combined $5 million in lost revenue each day.

The calamity couldn’t have come at a worse time. Even before Sandy smacked into the Garden State, Atlantic City’s casinos were hurting. According to the state’s Division of Gaming Enforcement, revenues from gambling for the first nine months of this year were down 4.8 percent from the same period last year. What’s more, gaming revenues, which totaled $3.3 billion in 2011, have been trending steadily downward for six years now, falling by about $2 billion since 2006.

In Sandy’s wake, Moody’s Investors Service forecast a decline in Atlantic City’s casino revenues of at least 25 percent over the next two quarters, and possibly by as much as 50 percent at the start of 2013. This is not only a result of the mandatory five-day closure, but also the lingering negative perception among prospective visitors.

“Hurricane Sandy’s impact on the gaming, lodging and cruise line industries is almost entirely centered on the already ailing Atlantic City market,” Moody’s noted in its report.

“We’re still evaluating the total loss of business and the cost of damages,” says Guaracino. “And the impact isn’t just on the casinos, but also on the many industries that support them. Cleaning services, food suppliers, providers of bed linens, nearby bars and restaurants. You name it. The impact reaches far and wide.”

And then there’s the problem of Atlantic City’s so-called “feeder” communities, nearby towns to the north and west that supply the city with so many of its annual visitors – and much of its workforce.

“The issue isn’t really Atlantic City. It’s the communities around us,” says Bob Kephart, owner and manager of the Comedy Stop comedy club inside the Tropicana Casino. “Our motors are running, the casinos are ready, but the people around us are still digging out from this storm and dealing with some significant problems.”

But Kephart says he and his fellow Atlantic City business owners are optimistic. Thanksgiving week, he says, is one of his busiest times of year (often trumping Labor Day weekend) and he’s hopeful that the upcoming Christmas season will also draw visitors to the city’s myriad shops, restaurants, and evening entertainment.

The big challenge is spreading the word that those aerial photos don’t tell the whole story.

“I want people to know that the workers of Atlantic City are here and ready to welcome folks back,” says Guaracino. “The AC experience that people know and love and have enjoyed is still here. And really, tourism is a part of the recovery effort down here, just as much as donations and manpower. It’s all connected.”

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