Atlantic City continues to recover from 'lost decade'
Posted in: In The News on Saturday, April 01, 2017
The past 10 years have not been kind to the resort. Local economist Oliver Cooke has a name for it: “The lost decade.” Property values fell by a third, the casino industry shed more than 21,000 jobs and the poverty rate increased dramatically. “By any metric, the last several years have been grim for the greater Atlantic City area,” said Cooke, associate professor of economics at Stockton University. “The great recession didn’t help, but the fall of the (casino) economy played a huge role.” But the next decade may mark an improvement, according to the South Jersey Economic Review, a biannual report released last week in conjunction with the William J. Hughes Center for Public Policy at Stockton. Cooke warns it could be a slow process because of how far the city has fallen over the past decade. But the announcements of a tax settlement between the city and Borgata Hotel Casino & Spa and a $300 million Hard Rock Hotel and Casino at the former Trump Taj Mahal Casino Resort have increased confidence the city’s economy may be starting to turn around. “The fact remains that Atlantic City’s redevelopment will take many years,” Cooke said. Among the biggest questions is which of the recent redevelopment projects and proposals are likely to most help the city in the long run, he said. There are other questions, too, in a city whose primary industry was hammered when casinos opened in Pennsylvania, New York and elsewhere in the past decade. These siphoned gamblers from Atlantic City properties and contributed to the closings of five casinos since 2014. The decrease in local competition generally benefited the surviving Atlantic City properties. But Jim Kennedy, former executive director of the Casino Reinvestment Development Authority, said adding Hard Rock to the casino market could put the city back in the same situation it was in at the start of the decade. “It will make for a much more spectacular trip, but you are still in the end going to hit the iceberg,” Kennedy said. “The continuing expansion of casinos in the surrounding states guarantees a sinking Atlantic City casino industry. The really good idea for Atlantic City would be to create economic diversification.” That has been the goal of the city and Atlantic County for years, particularly in the past few years. The reasons are in the economic data. During the past decade, payroll employment in the city dropped by more than 25,300 jobs, or 16.5 percent, according to The South Jersey Economic Review. The gross domestic product of the metropolitan area that includes Atlantic City fell by 21 percent from 2006 to 2015, the report states. That is the largest decline recorded among the nation’s 382 metropolitan areas, according to the report. While the casino industry continued to retract, reliance on government safety-net programs increased, according to the report. In 2000, unemployment insurance, Medicaid benefits and other income-maintenance programs totaled $374 million, or 4.7 percent of the personal income in the city. By 2015, that number had spiked to $907 million, or 7.6 percent of total personal income, according to the report. Despite the dire situation, Mayor Don Guardian never gave up hope the city would return to its former glory. “We have been planting seeds and rebuilding Atlantic City block by block so that our new beginning would lead to a brighter future,” Guardian said. “Our residents never lost hope in the greatness of Atlantic City. We are rebuilding Atlantic City together. One day, many years from now, we will all be able to enjoy the fruits of our labor in a revitalized Atlantic City.”
Atlantic City appears to be on the rebound, according to study
Posted in: In The News on Tuesday, March 28, 2017
After a lost decade, which featured a housing crisis, a recession, and the closing of five casinos, the resort's redevelopment appears to be moving in the right direction, according to a biannual report released Tuesday. The South Jersey Economic Review, released in conjunction with the William J. Hughes Center for Public Policy at Stockton University, said the city appears to be gathering monument. Oliver Cooke, associate professor of economics at Stockton, said the decision of Hard Rock International to buy and reopen the closed Taj Mahal property, as well as the recent state-brokered settlement of a tax dispute between Borgata and the City of Atlantic City, as positives as the city looks to bounce back. “The impact of the local area economy’s lost decade on its residents’ welfare has been stark,” Cooke said. “The metropolitan area’s poverty rate climbed from 9.2 percent in 2006 to 14.3 percent in 2015, while the poverty rate for those younger than 18 years old rose to 22.3 percent from 13.2 percent.” During the last decade, the casino industry has shed more than 21,000 jobs, according to the report. Despite Hard Rock's pending arrival and the tax settle, the Cooke warns that the city's rebirth could take some time. “The fact remains that Atlantic City’s redevelopment will take many years,” Cooke said.
Which Atlantic City casinos are still open? And which may soon reopen?
Posted in: In The News on Monday, March 27, 2017
The last few years in Atlantic City have been littered with casinos closing — including the last two that bore now-President Donald Trump's name. Where the iconic seaside town, once the gambling hub of the east coast, had 12 casinos at the height of its popularity, five shut their doors since 2014. That's largely thanks to increased competition from gambling halls neighboring states. But the city has been trying to fight back, helped along by the decision by Gov. Chris Christie's administration to take over large parts of city hall to stave off bankruptcy. One casino has reopened as a hotel. Another is slated to become a water park. And another was recently bought by an internationally branded company. Here is a look at the seven casinos that are still open and what's happening with the other five: STILL OPEN Borgata The marina property, which opened in 2003, was the city's highest-performing casino last year, according to figures from the New Jersey Division of Gaming Enforcement. It brought in $769 million in revenue — up 3.8 percent from the year before. Harrah's The marina property, which opened in 1980, was the city's second-highest-performing casino last year. It brought in $358 million in revenue — down 4.3 percent from the year before. Tropicana The boardwalk property, which opened in 1981, was the city's third-highest-performing casino last year. It brought in $341 million in revenue — up 9 percent from the year before. Caesars The boardwalk property, which opened in 1979, was the city's fourth-highest-performing casino last year. It brought in $302 million in revenue — down 2.7 percent from the year before. Golden Nugget The marina property, which opened in 1985 at Trump's Castle and later became Trump Marina before being sold and rebranded as the Golden Nugget, was the city's fifth-highest-grossing casino last year. It made $251 million — up 9 percent from the year before. Bally's The boardwalk property, which opened in 1979, was the city's sixth-highest-performing casino last year. It brought in $210 million in revenue — up 0.1 percent from the year before. Resorts The boardwalk property, which opened in 1978 as the first casino in Atlantic City, was the city's seven-highest-performing casino last year. It brought in $173 million in revenue — up 6.7 percent from the year before. Only the Trump Taj Mahal, which closed in October, brought in less revenue. REOPENED AS SOMETHING ELSE Showboat The boardwalk casino closed in 2014 after 27 years. Stockton University bought the property that year and planned to turn it into a campus, but the deal fell through. It eventually reopened last July as a hotel. CLOSED BUT REOPENING Trump Taj Mahal The boardwalk casino was the last property in the city to still bear Trump's name. The real estate tycoon, now America's 45th president, owned up to four casinos in the city between 1984 to 2009. The Taj struck a deal with Trump to keep his moniker on the signs. But new owner Carl Icahn shuttered the casino amid a workers strike in October of last year. He brokered an agreement last month to sell it to a group of investors led by Hard Rock International last month. The team said it will invest $300 million to purchase, revamp, and reopen the casino as the Hard Rock Atlantic City, possibly as soon as next year. Officials and experts are hailing it as a key moment for the city's financial recovery, with Christie saying it shows businesses are beginning to reinvent there. Revel The glitzy, mirror-surfaced boardwalk casino opened in 2012 to much fanfare but closed a little more than two years later. But developer Glenn Straub bought the property for $82 million in bankruptcy court and aimed to reopen it under a new name: TEN. The opening is still in limbo, as Straub has fought officials over red tape, regulations, and rules. CLOSED BUT REOPENING AS SOMETHING ELSE The Atlantic Club The boardwalk casino — once the Golden Nugget and then the Hilton — closed in 2014. But a development group from nearby Ventnor agreed last month to buy the property and plans to redevelop it as a water park, hotel, and family entertainment complex. CLOSED Trump Plaza Trump's first casino opened in 1984, but the businessman was involved in name only after he left his casino company in 2009. Like he did with the Taj, Icahn acquired the gambling hall in bankruptcy proceedings. But while he was able to sell the Taj, Icahn has had trouble unloading the former Plaza — one of the first properties you see when driving into the city from the Atlantic City Expressway. The New York Post recently reported that it's because of a lease a $1 million-a-year ground lease that runs through 2078, which Trump signed decades ago.
Our view: Optimism grows as A.C. starts emerging from downturn
Posted in: In The News on Wednesday, March 22, 2017
How fitting the arrival of spring should find the greater Atlantic City community in good spirits. The signs of the city’s rebirth are pushing up like daffodils, reminders that with a little help people get through tough periods to flourish again. The mood in the region seems to be nearing a tipping point, with reasons for optimism starting to outweigh years of despair and resignation regarding Atlantic City. Time to shift from mere hope to realistic enthusiasm and support for the vigorous growth of early shoots of city redevelopment. The city headed for bottom with the closing of four casinos in a year and the effective bankruptcy of city government. To provide stability, state and local officials arranged for a subsidized call center to bring jobs to the city and for Stockton University to move forward on an Atlantic City campus. Then the outlook dimmed further when the Trump Taj Mahal, struggling to regain its footing after reorganizing, closed as a result of a labor dispute. What now looks like the start of a turnaround began, as it probably often does, with a handful of risk-taking entrepreneurs acting on the potential that many saw. Among them were Bart Blatstein, the Philadelphia redeveloper who acquired the former Pier at Caesars and Showboat casino hotel, and John Longacre and Mark Callazzo, who funded and built businesses in a city that often seemed headed in the wrong direction. Then the foundation was set last year by state leaders unshakably resolved, regardless of misguided opposition, to take over city finances and restore their soundness. In just over three months, the state effort started paying off — saving the indebted city about $93 million by renegotiating the tax refund it owed to Borgata Casino Hotel. S&P upgraded the city’s debt rating for the first time in years. Two weeks later, the Taj joined the revival story when it was purchased by a partnership of Hard Rock International and two solid investors. That’s worth 3,000 jobs, 2,000 hotel rooms for the growing convention/meetings sector, and a business boost to the northeast end of the Boardwalk. Gov. Chris Christie credited the takeover effort: “There is no doubt that this purchase was encouraged by our efforts to stabilize the finances of the city government.” After two more weeks, the closed Atlantic Club Casino Hotel was bought by a Ventnor-based group with plans to develop an indoor water park, hotel and restaurants. Stockton’s false-start purchase of the Showboat dampened early enthusiasm for its city campus, but the project now is shaping up as the hoped-for transformer of the city’s southern end, enriching its economy, culture and even character. The university district already will include retail space and an urgent-care center, and more is being planned — probably extending west to Bader Field. University officials told The Press editorial board city residents who can’t easily travel to Galloway Township are looking forward to the new educational opportunities. They’ll join the region’s degree-bearing core of 11,000 Stockton graduates, including many chief executives of businesses and organizations, according to President Harvey Kesselman. That influence will grow with a thriving A.C. campus. These positive developments should encourage elected officials at all levels to build on the momentum by supporting efforts to balance the city budget and make the dreams of entrepreneurs a reality. Success breeds success, and with a little more it will become self-sustaining.
Here's all the good news Atlantic City has received in the past month
Posted in: In The News on Wednesday, March 15, 2017
The past three years haven't been kind to Atlantic City. Five casinos closed, the city found itself in a $100 million budget hole with nearly $500 million in debt and was on its way to become the first city in the state to go bankrupt since the Great Depression. Then the state came in and took over. That's either a good thing or a bad thing, depending on your point of view. But in the past month the city has been deluged with development and job news, something it desperately needed. Here's what's happened in the city that points to a bright future for America's Playground.
New Jersey tourism grew in 2016, locally and statewide, report shows
Posted in: In The News on Thursday, March 09, 2017
Atlantic County may have an unemployment rate about one-third higher than the national average and a foreclosure rate more than three times the national rate, but tourism data show improvement in the region. For the first time in five years, tourism sales in Atlantic County grew.