On a winter’s day, the chill coming off the ocean seeps through the glistening shell of Atlantic City’s unfinished Revel Casino-Hotel. On this particular February afternoon, the voice of Governor Chris Christie booms through the vast, three-block-long building—where construction has been suspended for more than three years for lack of financing.
On the table in front of the governor lie an array of hard hats and two pieces of legislation—S-11 and S-12—which Christie proclaims will herald “a new Atlantic City.”
In essence, S-11 will put key parts of the city—the areas that include the casinos and the Boardwalk—under control of the state Casino Reinvestment Development Authority (CRDA). S-12 will streamline casino regulations and place the casinos under the purview of the state attorney general rather than the independent Casino Control Commission.
The legislation would transform Atlantic City “into what in my view it always should have been—a vacation and convention center for the world,” Christie says as he signs the bills, his words echoing in the emptiness of the Revel, built on 20 acres of prime Boardwalk real estate.
Under the legislation, the Revel itself gets a complex combination of tax breaks and shared financing with the state. According to the developer, Revel Entertainment, what was originally supposed to be a $2.4 billion, 1,900-room hotel, will be reduced to 1,100 rooms at half the cost.
In the crowd of several hundred onlookers are Christie partisans, legislators who supported the bills, casino executives and construction workers who would directly benefit from the restart of the Revel project. Conspicuously absent is Atlantic City mayor Lorenzo T. Langford, perhaps the biggest loser in the bill signing. The legislation relegates Langford and the city government to overseeing the lesser part of Atlantic City—a city that is starting to feel like post-World War II Berlin, partitioned into sectors of influence.
Christie does not shrink from the opportunity to take a shot at Langford, citing the corruption and incompetence in Atlantic City government before and since the casinos came to town in 1978.
But the vision Christie expresses this chilly morning for Atlantic City’s rebirth is no sure bet. In fact, his appearance is not the first time America’s Playground has heard such bluster.
Just as the railroads, the Boardwalk, the Miss America Pageant, the amusement piers, the casinos and the upscale Borgata each in its time brought an upsurge in Atlantic City’s fortunes, the completion of the Revel—with its plans for fancy shops, restaurants and fabulous ocean-view rooms—is seen as the potential spark for a new economic rebound.
Precisely what New Jersey’s proactive governor plans to do to restore Atlantic City’s sparkle is unclear. The governor’s office would not comment for this story, and even those who voted for the legislation are short on specifics.
“The real big difference is that the governor is paying attention,” says Vincent Polistina, the Republican assemblyman whose district includes Atlantic City and who was a cosponsor of the legislation. “We’ve let other people—the city, the county, the casinos, everyone else it seems—try to make Atlantic City wonderful, but now we have a concentrated effort led by a dynamic governor. He has put himself on the line, so we will make it work.”
The legislation empowers CRDA to create a master plan for the tourism district by February 1, 2012. The Authority—a 17-person board of state officials, casino executives, developers and other interested parties, 14 of whom are appointed by the governor—will be meeting over the next several months to write their plan.
“It is true that every time there has been a crisis in Atlantic City, we around here hope something will be done,” says Polistina. “We’re hoping that this will spur more business and distinguishes Atlantic City again.”
The last few years have been fallow for Atlantic City. Casino revenue is down 30 percent from 2001, the last really good year. Since then, the state’s cut—based on an 8 percent gaming tax—declined from about $400 million to $260 million in 2010. Employment in the casinos peaked at 45,000 in 2004 and was down to 33,000 earlier this year. The unemployment rate in Atlantic City overall reached 16.4 percent this spring, and Moody’s cut its bond rating three levels, stating in a report that a number of factors, from lower casino tax revenues to unsettled casino tax appeals by casinos to the overall economy have put the city in a rocky position.
Atlantic City’s malaise is largely tied to the general economic downturn of recent years, but its problems are compounded by competition from new casinos in nearby states—particularly Pennsylvania and New York—which are viewed as chipping away at Atlantic City’s gambling revenue.
The legislation carves out about 48 square blocks as a tourist district under state control. The intention is to add to police and sanitation services there—all under the oversight of CRDA. Further, the legislation restricts CRDA spending to Atlantic City, save for a small part designated for the state’s racetracks. Previously, the authority invested in development projects throughout the state.
The legislation also takes publicity and marketing out of the hands of the Atlantic City Convention and Visitors Authority, which now will focus on what Christie sees as its strength—the booking of conventions and hotel rooms. It is unclear who will actually handle future promotions—though the casinos themselves say they will do more. It is understood that no jobs will be lost among the small staff at the Visitors Authority.
By putting casino enforcement under the auspices of the attorney general, the bills move that responsibility closer to the governor’s office. Polistina and the other bill sponsors believe this will result in closer monitoring of casino adherence to the state’s gambling rules. The Casino Control Commission will still have some role; details have yet to be worked out.
Government jobs would be a wash—a few less casino regulators but more police and cleanup workers. More than slicing away fat, the governor seems to be focused on preparing the tourist district for the arrival of the next over-the-top casino, the Revel—and presumably arousing Wall Street’s interest as well.
To date, Christie’s Atlantic City gamble is hardly a hit with the financial world. In March, just a month after the governor trumpeted the plan, Morgan Stanley decided to cut and run, selling its $1.2 billion stake in the Revel for $30 million to an investor group. Standard & Poor’s cut its corporate credit rating on Revel to B-minus, saying, despite the new deal, “the negative rating outlook reflects our belief that the company will be challenged to generate the substantial level of cash flow necessary to accommodate its debt-service obligations.” Despite its downgraded bond rating, completion of the Revel is expected by the end of 2012.
Even some members of the governor’s own party, who are loath to challenge him on most issues, are not crazy about the state’s entry into Atlantic City amid cuts almost everywhere else.
“We are always concerned about home rule,” says Robert Singer, a state senator from Burlington County and one of a handful of Republicans who voted against the legislation. “Atlantic City has to grow up and take care of its own problems, and why the state right now should go in doesn’t make sense to me. We have a lot of places that need help all around the state, and this just doesn’t wash in the current budget chaos.”
Of course, this isn’t the first time Atlantic City has attracted power brokers and their big ideas for Atlantic City. The recent HBO miniseries Boardwalk Empire was based on the manipulations of politician/mobster Enoch “Nucky” Johnson, who turned Prohibition-era Atlantic City into a haven of debauchery and ill-gotten gains. The Boardwalk itself was built by railroad and hotel owners who saw gold where the train line hit the beach. The original casino owners, too, envisioned a place where slot machines and craps tables would produce smiles and line pocketbooks.
“Atlantic City always lurches from despair to euphoria and back again,” says Michael Pollock, a former Press of Atlantic City reporter whose Spectrum Gaming Group advises companies on the gaming industry. “That has been the history in the 33 years of the casino era at least, and I don’t think it is any different now.”
Don Marrandino is among those who believe the Revel could ignite an AC revival. Marrandino, who took over last year as eastern regional president for Harrah’s Entertainment, which has four AC casino-hotels, rides his bike for exercise on the Boardwalk nearly every day and can’t help but notice his future competition looming as he pedals. He revels in the thought of Revel’s completion.
“I lived through 21 years in Las Vegas, and every time something new came into the market, the whole market grew,” says Marrandino, an Atlantic City native. “People will come to see Revel and then come to see us, since they rarely go to only one place when they come to town. If I can give them something better as well, we will win, too.”
It was only a few years ago that this sort of optimism was pervasive in Atlantic City. Nearly $10 billion worth of casinos were on the drawing boards, and the Borgata had just finished its Water Club expansion—a $600 million, 800-room tower with high-end shops on the first floor and a 36,000-square-foot spa. One of the other proposed projects was Gateway, with former casino executive Wally Barr and former CRDA head Curtis Bashaw as principals. Bashaw, a prominent developer of Shore properties, said the project has gone through several stages, but is still alive and is now slated to become a Hard Rock Hotel. He has also made a go of the Chelsea, a non-casino hotel he opened in 2008.
“The efforts of the state now to coordinate and facilitate marketing is a good thing,” says Bashaw. “It is something we all missed when things were starting and then going good. We really never worked together. Further, the gloves are off to talk about the endemic problems—poverty, crime, abandoned buildings, ugliness—and that never happened in the past.”
Of course, Bashaw doesn’t claim to have a crystal ball. “I’m not sure how it will turn out, but in Atlantic City, lots of people love to dream.”
For Lorenzo Langford, Christie’s attention is more of a nightmare. The mayor fears that the governor’s plan will bypass a large part of his constituency. The city is 64 percent black and Hispanic, and more than a quarter of the 32,000 residents live at or below the poverty line. There is no supermarket or movie theater within the city limits, but seemingly plenty of places to find drugs and prostitutes.
“Christie wants to put more cops in the tourist district. So what sense does that make when the crime is elsewhere?” says Langford. He is incensed that the state used past corruption as a rationale for the casino takeover. Three mayors in the casino era have resigned under a cloud; one of them, Michael J. Matthews, was imprisoned after pleading guilty to extortion.
“The governor’s office has had corruption, too,” says Langford. “That doesn’t mean Christie is corrupt. Same with me—there has been corruption in Atlantic City, but don’t paint me with that brush.”
Langford has his own ideas about fixing the city. He would like a 1 percent wage tax since most of the casino workers and executives, especially the ones earning big bucks, live outside the city limits. “They use our resources, but our citizens get nothing. It would really help the infrastructure here,” he says. Langford has started knocking down unsightly properties and tried to plan for economic development, but with a limited tax base, unemployment and a recession, he says it’s difficult to deliver even basic services.
Marrandino is playing both sides of the table. He backs the Christie plan but is a big supporter of the mayor—particularly Langford’s periodic “worst eyesores” lists and his moves to demolish or upgrade many of the blighted structures.
“You can’t blame [Langford] for being upset when someone comes in and bigfoots him,” says Marrandino. “But if he steps back and we all work together, we can make strides when everyone elsewhere doesn’t think we can do it. ”
Amid AC’s power shift, entrepreneurs have been shuffling the casino deck—often at bargain-basement prices. Former casino executive Dennis Gomes and New York real estate investor Morris Bailey bought the city’s first casino, Resorts International, for more than $31 million in December. They plan to commit tens of millions to freshen up the Boardwalk property, which lost $14 million in 2010. In February, Landry’s Inc.—the restaurant and entertainment group that includes Bubba Gump Shrimp Co. and Chart House—bought the Trump Marina for $38 million and will rebrand it Golden Nugget. (Trump Entertainment Resorts, which has emerged from three bankruptcies in the last decade, still has two casinos—Taj Mahal and Trump Plaza—but its namesake, Donald Trump, owns just 10 percent of nonvoting stock. Yet the hotels continue to promote “the Trump lifestyle.”) Another longtime fixture on the Boardwalk, the city’s original Golden Nugget, now the Hilton, is in default and will likely go for a bargain price to a new owner as well.
Others are investing on a smaller scale. Dean Weisgold, a 48-year-old lawyer from Philadelphia, bought a two-bedroom condo in an old house within a block of the beach at the south end of Atlantic City four years ago for $374,000. That’s probably half of what it would cost just a few miles down the beach in more upscale Margate or Longport—two of the municipalities (along with neighboring Ventnor) that share Absecon Island with Atlantic City.
Weisgold, his wife, Cheri, their 2-year-old son, Jacob, and their two dogs, love the beach on weekends and are pleased to have an Atlantic City address. “There are no crack addicts or anything like that. There is a new playground a few blocks away and I see lots of families here,” says Weisgold, who grew up coming to Absecon Island with his family. “It’s only a perception that Atlantic City can’t be as nice as Ventnor or Margate. We’re not gamblers, but we love being able to take a walk down the Boardwalk and eat in a really good restaurant. Maybe the city has to do more to tell about places to vacation for people like us.”
Atlantic City, though it stretches only 46 blocks along the beach and, even in its best years, had only 40,000 or so permanent residents, is awash in memories and has a cadre of self-styled historians.
“People have always thought they could make money in Atlantic City,” says Allen “Boo” Pergament, whom locals acknowledge as one of the unofficial city historians. “It worked that way during the Depression, then after World War II, with Miss America and the like. All sorts of people have had casinos here, and there always seem to be more in the wings.”
Vicki Gold Levi grew up in Atlantic City, the daughter of the town’s official photographer, Al Gold, and co-wrote the social history, Atlantic City: 125 Years of Ocean Madness (San Val, 1994). She served as the historical consultant for Boardwalk Empire. Levi lives in New York but visits Atlantic City often to get her fix of ocean air.
“All right, you can play craps in Pennsylvania and do a slot machine in Iowa, but these places don’t have the ocean, the breezes, the smell of salt water—or salt-water taffy and amusement piers and all this shopping,” says Levi. “Maybe it’s good the governor is getting into marketing. We have it all in place. We maybe just need a little rebranding.”
Marrandino, the casino association’s member on the CRDA board, favors increasing the importance of AC’s non-gaming elements, especially better and more varied entertainment and shopping.
Atlantic City has taken steps in that direction with the Walk, the 15-block stretch of mostly outlet shopping at the entrance to the city in an area that used to have housing projects. Launched in 2003, the Walk expanded in 2009; its developers hope for additional expansion fueled by an Atlantic City turnaround.
Marrandino has brought boxing to Caesars, one of the five Harrah’s properties, and cosponsored the first indoor rodeo at Boardwalk Hall in the early spring, which he deemed a success. The three-day event attracted 17,000 people, about twice what the sponsors expected. “Boardwalk Hall is the best midsized arena in the country and, we need to do more there. We will do more there.”
Chuck Darrow loves hearing such tales. He has covered entertainment in Atlantic City for three decades, these days as the casino columnist for the Philadelphia Daily News.
“When the Borgata came in 2003, everyone ramped up. So now I think they have the chance again with Revel and the recession being over,” says Darrow. “They have lost the grandma from Northeast Philly who just wants to play the slots at the Pennsylvania casinos, but so what? This is the spur to concentrate on a higher-end market.”
Then there’s Pinky Kravitz, an Atlantic City icon who was raised in the town and has been on radio here for 55 years. His longtime column, “Pinky’s Corner,” runs in the Press of Atlantic City.
“This is not a takeover. It is providing assistance,” Kravitz, 84, says of the Christie move. “If it works, then more people will come in to invest. There has always been room for new blood in Atlantic City.”
Robert Strauss is a frequent contributor.Click here to leave a comment