It’s fittingly overcast moments before Bart Blatstein arrives for lunch at Phillips Seafood at the Playground, his new incarnation of the former Pier Shops at Caesars in Atlantic City.
What was once known as America’s Playground has perhaps hit its nadir. Atlantic City is running out of money and faces a possible takeover by the state. Four of its 12 casinos were shuttered in 2014—including Revel, a $2.4 billion high-rise extravaganza that opened in 2012. Annual casino revenue dropped to $2.6 billion in 2015 from a high of $5.2 billion in 2006. The city is $240 million in debt.
To Blatstein, it smells like a good time to buy in.
“This afternoon I was touring the Showboat,” says Blatstein of the shuttered casino hotel he scooped up as part of a buying spree that has made the Philadelphia real estate developer a major investor in Atlantic City’s future. “It was weird walking around alone there. It was like The Shining.”
Blatstein, 61, bought the Showboat from Stockton University in January for just $23 million. He says it would cost $1 billion to build a similar property today. “I’m very pleased with that purchase,” he says.
He got a potentially bigger bargain in 2014, when his company, the Philly-based Tower Investments, purchased the bank-owned Pier Shops for just $2.7 million. The four-story, nearly 500,000-square-foot pier stretches over the beach across the Boardwalk from the giant Caesars casino resort. It too would cost $1 billion to build today, Blatstein says. At the time of the sale, the complex was only 40 percent occupied; Blatstein claims he doubled that within a year.
“When I took over the Pier, it was losing money year after year,” says Blatstein. “It was millions of dollars in the red. Now, it’s significantly in the black.”
Blatstein’s development partner, architect Paul Steelman, a Longport native, is equally bullish on Atlantic City. “The city is going to turn around, and it needs a maverick, and that’s what Bart is,” Steelman says. “He knows what he’s doing.”
He certainly knows about buying into a blighted market. Blatstein has made a fortune investing in depressed areas and transforming them into choice neighborhoods. “When other investors are running out,” says Blatstein, “I’m running in.”
When Blatstein first set foot in Philadelphia’s Northern Liberties area, it was a crime-ridden neighborhood badly in need of change. “It was desolate and dangerous,” says Blatstein, “way worse than Atlantic City.”
Homes were going for an average of $20,000 at that time. In 2000, Tower Investments bought the former Schmidt’s Brewery at a municipal auction. Reborn with a mix of residential and commercial space, the old brewery became the catalyst for neighborhood transformation.
That transformation has helped drive up property values, Blatstein says. “Some houses,” he claims, “are selling for a million and a half.” The area even has a trendy nickname: NoLibs.
Tower Investments has also helped revitalize Philadelphia’s riverfront and other areas, including North Philadelphia—where Temple University (Blatstein’s alma mater) is located. Among other projects, Tower built a 12-story residential facility for Temple students and a multiscreen movie theater just off campus. “I couldn’t get a theater chain to believe in the location, so I opened it myself,” says Blatstein. “Everything I did in Philadelphia people doubted.”
Blatstein, who is married with two children and two grandchildren, proved the naysayers wrong—and intends to do the same in Atlantic City.
Not everyone is convinced that Blatstein can do what prior investors—think Donald Trump—could not achieve. “Don’t buy the hype,” says Inga Saffron, who has followed Blatstein’s career as the architecture critic for the Philadelphia Inquirer.
Saffron, who has written “good Bart/bad Bart” articles, was initially critical of Blatstein’s NoLibs investments, but has modified her view. “I really like the Piazza,” Saffron says, referring to the mixed-use development at the Schmidt’s Brewery. “I like the architecture. I like the project. It’s just not managed well. It’s good Bart/bad Bart.”
When Saffron was informed that Blatstein envisions new casinos popping up in Atlantic City, she was incredulous. “Those days are over,” Saffron says.
But Blatstein believes a boom lies ahead for A.C. “I see cranes,” he says. “I see a lot of development. For those who think that this city has too many casinos, I can see 20 casinos here in the not-too-distant future.”
That’s quite a bold statement from a guy who, with his mom’s blessing, once wanted to be a doctor. But medical school wasn’t in the cards for Blatstein. At Temple University, “I socialized too much,” he admits. “My grades weren’t as good as they could have been.”
Shortly after graduation, Blatstein, then 23, bought a Philadelphia row home and flipped it. “That was my start,” he says. “I realized what I could do after buying that house and fixing it up.”
He never regretted the road not taken. “If I did become a doctor,” he quips, “I would be tempted to buy the hospital.”
Blatstein is certain he knows how to fix Atlantic City. “You need a plan to make things work,” Blatstein says. “The original plan here sucked—there was no structure.”
Certainly, the long-term vision of Atlantic City as a driver for the local economy has clouded with the years. When casinos opened in 1978, they enjoyed an East Coast monopoly. If you wanted to gamble legally and not fly to Las Vegas, you traveled to Atlantic City. “The casinos lived off the fat of the land,” Blatstein says. That was before gambling palaces started to blossom in Pennsylvania, Delaware and New York. But even in the face of such competition, Blatstein believes Atlantic City can be a winning destination. “You just need to give people a reason to come,” he says.
Blatstein sees an Atlantic City abuzz with shopping and nightlife as complements to the casinos. “You look at Las Vegas, and it’s 70 percent non-gaming and 30 percent gaming,” he says. “Here, it’s 75 percent gaming and 25 percent non-gaming. Look out on the streets.”
Indeed, the streets can be depressing. Boardwalk shops are few and primarily downscale. Pawnshops and strip joints populate Pacific Avenue, one block inland from the Boardwalk.
“There has to be some change here,” Blatstein says. “Regarding the places on Pacific Avenue, they aren’t good for the city. Eminent domain should be utilized when necessary to develop parcels and create jobs. I would like to soften things up, plant a few trees on Pacific Avenue.”
He cites Ibiza, the funky, party-friendly island off the coast of Spain, as a model for Atlantic City.
“Ibiza, while not pristine, is the European playground during the summer,” Blatstein says. “I see that happening here. What’s critical is that Atlantic City picks its market. Atlantic City needs to focus on those who are single, in their mid-20s to mid-40s. They want to party and they want edgy, and that’s what Atlantic City will give them.”
Blatstein’s involvement with the turnaround is starting at the Playground, which now has a pulse after limping along for several years. According to Blatstein, the property was losing $3 million annually. He says it’s now more than $1 million in the black. “And it’s only going to get better with what’s happening now and what’s coming up,” he says.
Wav, the new entertainment venue at the far end of the pier, features a notable guest deejay each week, à la the Borgata. With its multiple levels, giant LED screens and a 200,000-watt sound system, Wav is designed to attract the sort of crowd Blatstein says is essential to A.C.
The Playground is still growing. The Riviera Beer Garden is planned for a Memorial Day weekend opening. A salon and a high-end skin-care store, L’Core, will debut this summer. A bowling alley and a beach club are on tap. “It’s just the beginning,” Blatstein says. “We’re adding, and we’ve held on to what has been working. All the key tenants stayed.”
The Apple Store and Gucci, as well as some pricey, well-reviewed restaurants, including Phillips Seafood and Stephen Starr’s Buddakan and Continental, are among the noteworthy holdovers. In all, the complex houses almost 30 retailers.
It helps that Blatstein and Caesars, which adjoins the Playground, plan to work together for special events. Kevin Ortzman, president of Caesars and Bally’s Atlantic City, gushed about the relationship. “Bart has become a true visionary for Atlantic City,” says Ortzman. “We need more businesspeople like him in Atlantic City. Ones with that same entrepreneurial spirit.”
Blatstein hopes the new attractions will draw more visitors from North Jersey and New York. “A lot of those people go to the Hamptons, and with all due respect to the Hamptons, it doesn’t have the potential we have here.”
Key influencers, he says, can change the game for A.C. “We need celebrities…to tweet out about their experiences in Atlantic City,” he says.
That won’t happen overnight. The city has been tarnished by casino closings and this year’s talk of a state takeover in the face of its financial woes. Unemployment and the perception of crime are ongoing issues.
Blatstein knows the terrain. As a child, he summered with his family in Atlantic City, and he has had a summer home with his family in nearby Margate for 13 years. He seems unfazed by the city’s financial woes. “I’m optimistic,” he says. “Atlantic City will be transformed.”
Blatstein plans to add more to his A.C. holdings. He says the largely vacant land north of Revel—the area known as South Inlet—is screaming for development. “The infrastructure is good in A.C.,” he says. “It has to be taken advantage of. Look at the marina. It’s doing well. The Borgata is a great property. Harrah’s is good. You have the Golden Nugget there. But we have some emptiness here. We need a reason for people to come to the Boardwalk.”
At one time, many hoped Revel would provide that reason, but the Showboat’s neighbor closed after just 28 months.
“Revel is the worst-designed building I’ve ever seen,” Blatstein says. “There are so many reasons it failed. How can you have a casino on the Boardwalk and not be able to enter it from there? How can the lobby be on the sixth floor? How can you have a casino but not have one elevator open to it?”
Despite all that, Blatstein hopes the Revel, which new owner Glenn Straub purchased last year, will succeed the second time around.
And what if Blatstein’s newly acquired properties don’t attract the crowds he predicts? “Then I’ll have the greatest beach house on the entire island,” Blatstein says. “Who can top this?”
The sun is glinting off the Atlantic. The weather has changed, and Blatstein believes A.C.’s luck can change as well.
“Don’t bet against me,” he says. “Come back in a few years and you’ll see what this town turns into.”
Ed Condran is a freelance writer based in Jenkintown, Pennsylvania.Click here to leave a comment
Atlantic City is on the move !! Mr. Blatstein will get it done ?? !! I’m buying there very soon & you should too !! ?