|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
May 26, 2011--ATLANTIC CITY -- Hard Rock International is moving ahead with its planned $300 million venture at the southern end of the Boardwalk by seeking the permits necessary to build the resort's first boutique casino hotel, with fewer than 500 rooms.
On June 6, Hard Rock is expected to file a petition for a Coastal Area Facility Review Act (CAFRA) permit, among the first prerequisites for building along the coast of New Jersey, according to several parties involved in the project.
State Sen. James Whelan (D., Atlantic), a former Atlantic City mayor who sponsored the boutique-casino bill in Trenton, said: "The project is going. They are still proceeding on their plans, and hopefully we'll hear something in the weeks ahead" about development issues.
Whelan said Hard Rock could create up to 1,000 construction jobs and 500 to 1,000 permanent casino and hotel jobs.
A structural engineer, who asked not to be identified because of confidentiality agreements, said he had been told to have his drawings done by June 6 for the CAFRA review.
"A CAFRA permit is a permit that developers have to secure before they build along the coast," Larry Hajna, spokesman for the state Department of Environmental Protection, said Wednesday. "Any large project would need that permit to construct in that area."
The casino is proposed for Albany Avenue and the Boardwalk, next to the Atlantic City Hilton, on land that Shore developer Curtis Bashaw and former gaming executive Wally Barr once staked out for a $1 billion gambling palace.
Hard Rock's project would be the third major development to advance here in recent months. Since the economy soured and competition from Pennsylvania casinos intensified, Atlantic City's gambling industry had been hemorrhaging revenue, and investment had dried up.
"For the first time in a few years, one can see hope on the Atlantic City horizon," said Joseph Weinert of Spectrum Gaming Group L.L.C. in Linwood. This year "will be another difficult year, but the seeds now being planted in the form of Revel, the Golden Nugget, and the state tourism district should begin blossoming next year."
Weinert added: "Some investors have already bought into the coming rebound, but many are still skeptical."
One person who is all in on Atlantic City's recovery is Gov. Christie, the driving force behind a state-run overhaul of the troubled resort begun this year.
Among the initiatives pushed by Christie were the creation of a state-run tourism casino district and the easing of casino regulations to encourage investment.
On Feb. 1, Christie announced that the long-delayed Revel Casino next to Showboat at the northern end of the Boardwalk would receive a $261 million tax rebate intended to help complete the $2.5 billion casino. Within weeks, Revel announced that it had secured the final $1.15 billion from Wall Street banks to restart construction. The massive casino is hoping for a mid-May 2012 opening, according to chief executive officer Kevin DeSanctis.
On Monday, Landry's Restaurants Inc. in Houston got final approval from the New Jersey Casino Control Commission for its $38 million purchase of the struggling Trump Marina Hotel Casino from Trump Entertainment Resorts Inc. and immediately embarked on a $100 million, six-month makeover of the casino into a Golden Nugget.
And in December, the financially strapped Resorts Casino was sold for $31 million to owners planning to invest a substantial amount on its renovation.
Wall Street analysts and investment bankers at the East Coast Gaming Congress here this week said credit markets had loosened up, making it easier for developers to obtain financing for casino projects and expansions.
"What's encouraging is that the markets have been quite robust across all parts of the capital structure," said Adam Rosenberg, managing director and global head of the gaming group in the investment-banking division of Goldman Sachs & Co., which has a stake in the land that is the proposed site for the Hard Rock casino. Goldman was involved in the original financing for Philadelphia's SugarHouse Casino and its $235 million bond refinancing last month.
"We should all feel good about how the capital markets have supported these projects," Rosenberg added.
In the summer of 2008, partners Bashaw and Barr decided to join Hard Rock in pursuing a scaled-down casino at the Albany Avenue site, as others, such as Pinnacle Entertainment Inc. and MGM Resorts International Inc., began pulling out of announced billion-dollar-plus developments.
In March 2010, Hard Rock, based in Orlando, and Och-Ziff Real Estate of New York -- managing partner of Atlantic City Gateway L.L.C., which owns the property and includes Bashaw as a partner -- announced they would "explore" developing a Hard Rock Hotel & Casino. But the partnership made it clear that moving forward depended on state legislation permitting smaller boutique casino hotels in Atlantic City.
On Jan. 5, Christie signed that bill into law, opening the door for a casino hotel with as few as 200 rooms instead of the 500 mandated by the state's Casino Control Act since gambling was legalized in New Jersey in 1976.
The new law, which Christie considered the first step in his Atlantic City recovery plan, also gives developers the option of opening a "staged" casino of not more than 30,000 square feet with a hotel of at least 200 rooms, with the requirement that it would expand to 500 rooms within five years of licensing.
The $300 million Hard Rock would open with at least 200 rooms but not more than 500, as well as restaurants, nightclubs, a spa, a pool, and a parking garage. Contact staff writer Suzette Parmley at 215-854-2594 or firstname.lastname@example.org.
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