|By Bob Jordan, Asbury Park Press,
N.J.McClatchy-Tribune Regional News
March 14, 2012--ATLANTIC CITY -- Hard Rock International's plans to build an Atlantic City rock-and-roll themed casino are back on hold because of environmental permitting delays, increasing doubt that the dining and retail giant will go through with construction of the $465 million project.
Faced with a deadline to post a $1 million casino license bond, the firm instead gained permission from regulators Wednesday to hold up the process for 181 days until environmental coastline building approvals are secured.
But with the casino industry looking for signals that Hard Rock will be all-in to finish construction by the new target of January 2015, the picture remains murky.
Nicholas Casiello, a lawyer representing the company at the board meeting of the Casino Control Commission, said, "I wish I could say that this project was a done deal. We're not quite ready to say that yet."
Under legislation authored by state Sen. Jim Whelan, an Atlantic County Democrat, Hard Rock would build one of two new smaller "boutique" casinos under a pilot program to spur investment in the city's gaming district after a five-year slump.
There's been no applications made for the other boutique casino license, said commission Chairwoman Linda Kassekert.
"We've had conversations with several parties but so far only the Hard Rock people moved forward with it," Kassekert said.
Whelan said he remains bullish on Atlantic City's prospects and said he's optimistic Hard Rock will build, though he conceded "a lack of available capital for major development" is being felt in the city.
"The good news is that Hard Rock isn't pulling the plug. The bad news is there's a delay," Whelan said.
Whelan, who did not attend the meeting, said in a telephone interview that a strong opening for the new Revel megacasino in May would likely prompt a rally from investors.
"If Revel performs like some people expect it to, that would be very exciting to anybody doing business in Atlantic City," Whelan said. "The new projects have a history of doing very well in Atlantic City."
Hard Rock's environmental permit delays are associated with work that has possible impact on the beach, Casiello said.
Thomas J. Sykes, an architect for the applicant, said 95 percent of the design "is in compliance if not the spirit" with coastal environmental regulations. A cafe that would overlook the ocean has drawn the most scrutiny from environmental regulators.
Gov. Chris Christie's administration recently cleared a rule that provides Department of Environmental Protection waivers when developers find rules overly burdensome. Waiver applications can be filed starting Aug. 1.
Casiello after the meeting said he was aware of the new policy but declined to comment on whether a waiver will be sought.
Plans call for a casino and hotel with 208 rooms, expanding in stages to 850 rooms, with a music museum stocked with Hard Rock's extensive rock-and-roll memorabilia.
This is not the first delay for the project. The company submitted building plans with the DEP in June 2011, then made no additional public comments about its plans for five months, creating speculation that the company was jumping ship as Atlantic City's gaming business continued free-falling.
Hard Rock is owned by Florida's Seminole Indian tribe. Also investing is the New York-based Och-Ziff Capital Management Group. The joint entity is called AC Gateway LLC.
The pilot program for smaller-scale casinos was signed into law last year Christie.
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