As Another Casino Topples, AC Tries to Reinvent Itself - NBC 7 San Diego
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As Another Casino Topples, AC Tries to Reinvent Itself

What must Atlantic City do to turn itself around?

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    NEWSLETTERS

    Trump Plaza Closes Doors

    The Trump Plaza is officially out of business. NBC10's Jesse Gary spoke with former Trump Plaza employees about what's next after the casino closed. (Published Tuesday, Sept. 16, 2014)

    The Trump Plaza in Atlantic City shut down for good early Tuesday morning, the latest casino to fail as this once high-flying resort city faces fierce competition from gambling elsewhere.

    When the doors closed at 5:59 a.m., the tally of jobs lost this year rose to about 8,000, a quarter of the casino workforce, according to figures filed by the city's casinos. Hundreds of former employees have been filing for unemployment benefits, health care, heat assistance and food stamps. More may need help soon. Trump Entertainment Resorts is in bankruptcy and is threatening to close the Trump Taj Mahal Casino in November if it does not get concessions on labor costs.

    With Atlantic City’s gambling revenue plummeting from $5.2 billion in 2006 to $2.86 billion last year, according to the Center for Gaming Research at the University of Nevada, Las Vegas, the suffering shore resort is scrambling to reinvent itself. Only eight of its 12 casinos will remain and competition in Pennsylvania, Maryland, New York, Delaware and elsewhere continues to grow. Officials are searching for ways the city can appeal anew to visitors and stop hemorrhaging jobs and revenue.

    “It’s really a repositioning of the city itself,” said Mark Giannantonio, the president of Resorts Casino Hotel, which turned itself around after adding a Jimmy Buffet Margaritaville entertainment complex. “It’s more right-sized for the market in gaming and it’s an opportunity for us to continue to go after this non-gaming element, which in turn helps gaming.”

    Officials are hoping a mix of convention space, entertainment venues, shops, a college campus, plus the casinos will transform the city from a gambling hub into a resort with a variety of attractions. Atlantic City’s non-gambling revenue is growing but at half the rate its gambling revenue is dropping.

    LURING CONVENTIONS, CORPORATE MEETINGS

    One place to look as a model: Sin City. The Las Vegas Strip managed to curb its reliance on casinos. A little more than one third of its revenue comes from gambling, compared to 72 percent in Atlantic City. But experts caution the change will not be easy.

    For example, there is already a glut of convention space across the country, said Heywood Sanders, a professor at the University of Texas at San Antonio and the author of “Convention Center Follies.”

    We’re an interesting mix of a little bit of urban grit and variety, but at the same time we’re beachfront. We call it the thrill and the chill.Elizabeth Cartmell, president of the Atlantic City Alliance

    Demand in 2013 was only slightly above where it was in 2000, he said. Meanwhile, the amount of exhibit hall space has increased by 37 percent. Major convention cities across the country have seen their business remain flat or fall. At the biggest convention center in the country, McCormick Place in Chicago, business dropped from 1.55 million attendees in 2003 to 868,000 last year.

    “What we see in major events around the country is that fewer people are going,” Sanders said. “And that’s partly because employers are less willing to send lots of people out of town to a convention and trade show for an extended period.”

    The president of the Atlantic City Alliance, Elizabeth Cartmell, said that the city would compete not only for conventions but also for smaller meetings of 50 to 500 people, where the glut of space is not as severe. Only 2 percent of smaller meetings originating in the Northeast comes to Atlantic City compared to 15 percent that goes to Las Vegas, she said.

    MIAMI AS A MODEL

    The alliance, funded with a $30 million a year assessment on the casinos, is promoting the city as a year-round seaside resort through beachside concerts, wine tastings, fishing tournaments and pro volleyball competitions. Lady Gaga and Lady Antebellum performed this summer, a series of long-distance triathlons added Atlantic City as one of its locations and the Miss America contest has returned from Las Vegas.

    An 86,000-square foot Bass Pro Shop is under construction and is expected to bring almost 300 full- and part-time jobs.

    The alliance is looking at Miami as a model, Cartmell said. Atlantic City offers an exciting nightlife but also the chance to relax on the beach and visit a spa, she said.

    “We’re an interesting mix of a little bit of urban grit and variety, but at the same time we’re beachfront,” she said. “We call it the thrill and the chill.”

    Giannantonio, the Resorts Casino Hotel president, has said that five years ago his property would have been the first casino to close. That changed with a new owner, Morris Bailey, a partnership with the Mohican Sun casinos and the new Margaritaville restaurant and LandShark Bar & Grill, Atlantic City’s first beach restaurant.

    “You’re sitting right on the beach, feet from the ocean, thinking you could be anywhere in the country,” he said.

    To bring people back into the city, Mayor Donald Guardian has proposed giving away land and tax breaks to new homeowners who build within two years and commit to staying for 10. The five years of tax abatements would begin at 100 percent and decrease 20 percent each year after. Both programs are still in the planning stages, and details are being worked out.

    Even during the boon years, much of the riches from gambling did not find their way past the glittering lights of the resorts. Twenty-five percent of the city’s population of 39,500 lives below the poverty, according to Census figures. The figure is even higher for those under 18: 37 percent.

    The city ranks second in New Jersey for violent crimes trailing only Camden, FBI data from 2012 shows. Family income is about $30,000. The unemployment rate stands at 13 percent.

    A NEED FOR NEW HOMEOWNERS

    Michael Busler, a professor of finance at Stockton College, said the mayor’s plan was not enough. He said the city would have to offer a bigger incentive and he suggested 10 years of tax breaks as Philadelphia has done.

    The value of Atlantic City’s real estate has shrunk from $20 billion when the casinos were thriving to about $8 billion, Busler said. At the same time, property taxes have gone up 22 percent last year and 29 percent this year. The city’s $262 million budget has to be cut to between $175 million and $180 million, he said.

    We shouldn’t be stunned that a city has to reinvent itself.Bryant Simon, Temple University professor and author

    Atlantic City was first developed as an oceanside resort in the 19th century. When gambling was legalized in 1976, the casinos turned away from the beachfront. Their design was meant to keep people inside – and gambling.

    “Now we can’t do that anymore,” Busler said. “Now we’re going to emphasize we have a beautiful beach.”

    Atlantic City has to find ways to rebuild that will help the city itself grow, said Bryant Simon, a professor of history at Temple University and the author of “Boardwalk of Dreams: Atlantic City and the Fate of Urban America.”

    Even while the casinos thrived, the city withered and for years lacked even a supermarket.

    “Let’s not do that again,” he said. “Let’s have fresh produce. Let’s have year-round jobs.”

    The city could try high-speed rail service to Philadelphia, so residents could work there, he said. It could open a satellite campus of the nearby Richard Stockton College of New Jersey and have a core of students studying casinos and urban redevelopment. Or it could add to the city’s medical complex. The city needs to make sure it is creating decent paying jobs, not just low wage, tourism jobs, he said.

    “We shouldn’t be stunned that a city has to reinvent itself,” he said. “Cities are always places of creative destruction and renewal and resorts probably in particular because they cater to people’s desires and their desires change.”