|By Jennifer Bogdan, The Press of Atlantic
City, Pleasantville, N.J.McClatchy-Tribune Regional News
Nov. 21, 2012--A $134-million Las Vegas-style conference center is in line to be the newest addition to the list of amenities Atlantic City has to offer.
The Casino Reinvestment Development Authority on Tuesday approved a $45 million contribution to the 200,000-square-foot edition at Harrah's Atlantic City, half of which would be conference space. Caesars Entertainment officials promised the center modeled after its counterpart at Caesars Palace in Las Vegas will provide the most flexible meeting space on the East Coast with nothing comparable existing outside of Las Vegas.
"I tend to think big," said Caesars Eastern Division President Don Marrandino, adding that a year and a half ago the project was envisioned at just one-quarter of its size, with plans later enlarged to create a "game changer" for the city. "Having been in Las Vegas, there's three or four of these facilities. They're world-class and they draw people."
The project, which is expected to break ground in January and open by July 2014, received unanimous support from CRDA's board, but only after lengthy discussion reflecting the magnitude of the project. Board members expressed concern over the remainder of Caesars financing for the center, much of which is expected to come from loans, which have not yet been secured.
David Rebuck, director of the Division of Gaming Enforcement, asked Caesars for a verbal committment that construction would start in January, but officials said the start of construction will be tied to financing the company hopes to have in place by December.
"In my expereince on CRDA, (the pattern with) some of the casinos and operators has been to promise us things that they have not been able to deliver on in a timely manner. With the sense of urgency that exists with all of us here in Atlantic City to move forward, when you make a committment to look to begin construction, I think it's a committment that we'd like to see you hold to very strongly," Rebuck said. "You're in a positive position to deal with your lenders. If they need to be convinced that this is a good market to invest in, we're certainly at your disposal to help you convince them of that."
Officials, including Marrandino, pointed to the national media's coverage of Hurricane Sandy in Atlantic City as ongoing impediement that continues to impact perceptions of the resort. Had it not been for the storm, Caesars might have come to Tuesday's meeting with lenders already in place, said Marrandino, who pointed to the results of survey released Monday by the Atlantic City Alliance, which showed that 41 percent of Americans polled nationwide following the storm believed that the Atlantic City Boardwalk had been destroyed.
"If this was four weeks ago, I think we'd have the documents with us," Marrandino said. "But I think it's going to take time for people to say we're OK."
Previously, CRDA board members had voiced concerns that the center with large glass windows overlooking the bay in the resort's Marina District could cannibalize the city's existing conference business, primarily affecting the Atlantic City Convention Center.
However an impact study presented Tuesday by Chicago-based consultant Charles Johnson found that the Harrah's center would add new demand for corporate meetings. Although the Convention Center has a 29,400-square-foot exhibit hall that can be used as a ballroom, Harrah's conference space will be larger and more upscale, making it more ideally suited to corporate markets, the study states.
Drawing business travelers to the city will have a positive impact across the resort, Caesars officials said, noting that people traveling with corporate credit cards tend to spend more on dining and entertainment. The center is projected to host 309 events in its first year of operation with a total of 98,400 attendees. That stabilizes by year five when the center is expected to see 351 events with 129,600 attendees.
"Many of the venues (in Atlantic City) are more entertainment-oriented and don't necessary have the kind of space that we would see in a more traditional meetings venue," said Johnson, whose firm was selected by CRDA. "What's being proposed id a different kettle of fish, and it's a new product for Atlantic City. ... There's not one other ballroom over 50,000-square-feet that's not associated with the Convention Center in the entire marketplace. That alone provides some currency for the facility."
Beyond the Convention Center and Boardwalk Hall, however, another 908,530 square feet of meetings and event space exists. The largest individual space outside of the Convention Center is at Trump Taj Mahal Casino Resort where the Mark G. Etess Arena encompasses 63,000 square feet of space. The Events Center at Borgata Hotel Casino & Spa, and Ovation Hall at Revel follow that with at 30,000 square feet each, but both the Borgata and Revel spaces are primarily entertainment venues with meetings as a secondary use.
"Although it is anticipated that there will be some overlap of demand for the proposed facility and existing resort/hotel meeting space, particularly the larger meeting facilities at the Taj Mahal, Borgata, and Revel, it is considered that (Harrah's) proposed product is designed much more appropriate to attract the corporate demand," the study states.
The $35,000 market feasibility analysis was paid for by Caesars at the request of CRDA, which selected the consultant.
As a condition of CRDA's approval, Caesars will contribute $9.5 million in an existing CRDA account to the construction of a permanent indoor marketplace in the city. In September, CRDA opted to undertake a $100,000 feasability study for the project, envisioned as a development similar to the Reading Terminal Market in Philadelphia with bistros, flower shops, and stores.
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(c)2012 The Press of Atlantic City (Pleasantville, N.J.)
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