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Month of Changes Fosters Optimism for Turnaround of Atlantic City

By Emily Previti, The Press of Atlantic City, Pleasantville, N.J.McClatchy-Tribune Regional News

Feb. 20, 2011--ATLANTIC CITY -- The private casino deals and government regulatory changes of recent weeks have tourism and casino industry stakeholders believing Atlantic City is in position for a turnaround.

Whether it capitalizes on that momentum will be determined during the next two years as the city's new regulatory structure and revitalization plans are finalized, then implemented, and recent sales and financing agreements show results, business leaders say.

"I'm seeing just a better feel about the business environment and the economy," said Greater Atlantic City Chamber President Joe Kelly. "Implementation is everything. Following through on what needs to be done is key. But certainly, a better feel about these developments is an indication that we're headed down the right track."

Friday concluded an 18-day stretch of major developments in the city:

--The first: Gov. Chris Christie enacting laws establishing a Tourism District and laying out the process for improving public safety, marketing, infrastructure and other components key to realizing Atlantic City's potential as a tourist destination. --On Monday, the sale of Trump Marina to Landry's Inc. for $38 million was announced. While the price is a fraction of pre-recession casino sale prices, the figure doesn't include the $150 million in renovations that will accompany a rebranding of the property as the Golden Nugget. --Three days later, $1.15 billion in loans came through to finish building the stalled Revel casino project. The South Inlet neighborhood surrounding Revel will get $125 million in infrastructure investments during the next two decades, another announcement Christie made during his Feb. 1 visit to the Revel site. --Other positives include a new law allowing two smaller, boutique casinos to be built in Atlantic City and new ownership of the Resorts Casino.

Now that Revel has the money to finish its $2.8 billion casino, 2,000 workers will be back at work there before spring starts.

That's vital, said Richard Perniciaro, director of Atlantic Cape Community College's Center for Regional and Business Research.

"In most recoveries, it all starts with construction," Perniciaro said. "(A turnaround in Atlantic City) is going to take a change in consumer and investor sentiment. Once people start working, and you see cranes, people will change their sentiments."

State Assemblyman John Amodeo, R-Atlantic, is among the people with ideas to help that along.

Amodeo said Friday he is drafting a bill that would forgive the state's 4 percent portion of the total 9.5 percent in taxes on hotel rooms booked by conventions during the off-season: Oct. 1 through March 31. He figures the state would make up most of that in sales tax revenue generated by guests' spending at retail, dining and other establishments during their stay, he said.

Amodeo acknowledged a lot of work remains.

"As hard as we worked for the (Tourism District and deregulation) legislation, S-11 and S-12, as arduous and difficult as it was to get to the compromise and where we needed to be, the real work is now. Some stuff isn't going to work, and we're going to have to make changes as things unfold," he said.

Christie needs to appoint a replacement for Thomas Carver, who resigned effective last week as director of the Casino Reinvestment Development Authority, the resort-based state agency charged with overseeing the Tourism District. The CRDA has a year to establish a master plan for the zone and figure out logistics for coordinating with the Atlantic City Alliance, a public-private partnership that will direct casino investment in redevelopment within the city. It has until July 1 to get its own master plan together.

And the mechanism for retaining CRDA funds in Atlantic City, rather than spending some elsewhere, hasn't been defined and implemented.

But Susan Ney Thompson, the CRDA's interim director, said the agency has been fielding calls from people who want more information about setting up shop in the Arts Districts established at the end of last year. The CRDA intends to incorporate those plans in the master plan for the Tourism District, along with its own and other agencies' strategies to expand medical facilities and educational facilities around the AtlantiCare Regional Medical Center and ACCC campuses in the city.

"There's a lot of interest," Thompson said. "We're having an upsurge in confidence that Atlantic City is on the right track to move forward."

People also have recently pitched movie theaters, museums and other nongaming diversions to Jeremy Sunkett, director of project management for the CRDA. And Sunkett said he has talked with potential investors about The Pier, re-establishing cultural and other attractions along Kentucky Avenue and making downtown improvements, including repositioning old buildings, buying defaulted commercial properties and office, residential and infrastructure development.

Meanwhile, Sunkett and his staff are completing a market analysis of the Arts District, will publish a request for proposals within three weeks or so for development there and run an investment conference with the Urban Land Institute in April.

Brian Tyrrell, hospitality management professor at The Richard Stockton College of New Jersey, said continuing the trends will hinge on Atlantic City's ability to reinvent itself as a resort that offers much more than gaming. That driving concept -- and specific changes to what Tyrrell thinks necessary to facilitate it -- closely match Revel CEO Kevin DeSanctis' vision for the South Inlet once his casino project opens and starts generating rebate money to fund improvements there.

"There needs to be this quarter where visitors feel safe and have plenty to do both inside and outside the walls of the casino and taking full advantage of its proximity to the ocean is the manner in which that should be done," Tyrrell said.

DeSanctis has likewise stressed the need to encourage restaurants and other diversions in a safer, more walkable surrounding neighborhood, meanwhile making the most of the beachfront outside and carving out what will be one of the city's largest entertainment venues inside the casino.

Some people pegged the start of what they hope will be the resort's revitalization to changes and transactions that happened in 2010.

Longtime Atlantic City resident, broadcaster and columnist Pinky Kravitz pointed to gaming industry veteran Dennis Gomes buying Resorts Casino, the first to open in the city in 1978.

Beyond buying the property and keeping it open, Gomes' vision for marketing the property with a Roaring '20s theme capitalized on the period building's authentic architectural features and the international popularity of the "Boardwalk Empire" HBO series, Kravitz said.

"Going through this recession, it's really been tough. Revel was in the doldrums. Resorts went into bankruptcy, Hilton went into bankruptcy, Trump went into bankruptcy. And there was no light at the end of the tunnel. It started with Dennis Gomes," Kravitz said. "And now, what we're starting to see taking place, it's just tremendous."

Perniciaro agreed.

"What Revel has done and the Marina has done are given us a point in time. In 15 months, we'll know what the Tourism District is, we'll know what the plan is, any changes to the legislation will be done by that point. We've established a clear (timeframe), that all of this had better come together," he said.

That window will also put the resort past the upcoming summer, which Perniciaro predicted will be, while better than last summer, tough all the same.

"With the drive-in market, there's nothing really new to come see other than Resorts, and energy prices will keep climbing. So this year will be a little difficult," he said. "But this beginning of 2011, it's a good sign."

Contact Emily Previti:

609-272-7221

EPreviti@pressofac.com

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To see more of The Press of Atlantic City, go to http://www.pressofatlanticcity.com/.

Copyright (c) 2011, The Press of Atlantic City, Pleasantville, N.J.

Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com. NASDAQ:CHCO,


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