News for the Hospitality Executive
|By Amy S. Rosenberg, The Philadelphia Inquirer
Knight Ridder/Tribune Business News
May 23--ATLANTIC CITY, N.J.--Seeking to mend fences with a casino industry furious over his proposal to tax rooms and meals "comped" to gamblers, Gov. McGreevey yesterday outlined a plan to revitalize Atlantic City into a "premier family resort destination."
McGreevey pledged to clean up the Boardwalk and surrounding blighted streets, add 3,500 parking spots, improve traffic by making Pacific Avenue one way, and study the possibility of bringing light-rail service to Atlantic City.
He also announced that in October, Delta Air Lines will begin flights between Atlantic City and its hub in Cincinnati, which connects to 85 other cities.
"I fully understand the importance of your substantial investment in this city," he reassured industry executives and others at the annual Mid-Atlantic Gaming Congress.
McGreevey got an immediate boost when J. Terrence Lanni, chief executive officer of MGM Mirage, announced that his company would move forward on its on-again, off-again plans to build a $1.5 billion resort in the city's Marina District.
McGreevey made no mention of his so-called tax on comps, which would raise about $33 million for the state by taxing all the meals and rooms -- about two-thirds of their inventory -- that casinos give away to regular customers.
But casino executives, public officials, and Wall Street analysts all seemed certain yesterday that the proposal would die a silent death.
"It's dead," said State Sen. William Gormley (R., Atlantic), whom McGreevey referred to in his speech as "his excellency, William Cardinal Gormley."
"They're just going to let it slide," said Jacques Cornet, an analyst with CIBC World Markets Corp.
"I'd be absolutely amazed if that tax goes forward," said Lanni, of MGM Mirage, which had said it was reevaluating its casino plans after McGreevey proposed his tax.
Lanni said the company would submit design plans for a hotel with a minimum of 1,500 rooms for state review by the end of the year.
He said he anticipated a groundbreaking in September 2003, shortly after the opening of the Borgata, another billion-dollar resort in the Marina section that is a joint venture of MGM Mirage and the Boyd Gaming Co. of Las Vegas.
Industry executives and elected officials hailed McGreevey's speech as historic and unprecedented for a governor in its commitment to Atlantic City and the gaming industry.
Paul Rubeli, chief executive officer of Aztar, which owns the Tropicana Casino Resort, said: "I think the message on Wall Street is going to resonate loud and clear."
Others were more wary. Cornet, the Wall Street gaming analyst, said: "It's certainly a nice wish list. We've heard the wish list before. We'll have to wait and see."
McGreevey said his goal in the next six months was to design a comprehensive plan for Atlantic City that would bring together public officials and private investors. He also said he would support streamlining state gaming regulations.
He said he wanted to study the possibility of light-rail service linking the city with the airport, connecting with Pennsauken and Camden, and possibly replacing the NJ Transit rail operation between Philadelphia and Atlantic City.
He said he was asking the state's Casino Reinvestment Development Authority to set aside $5 million to acquire and remove some of the blighted structures on the Boardwalk near Bally's Park Place Casino Hotel. The structures would be replaced with park and public spaces, he said, that would also open up a view of the historic Dennis Hotel.
He also said he was directing the Casino Reinvestment Development Authority to develop a plan to "demolish the five worst blocks near the casinos and corridors."
Asked whether that would mean displacing residents and businesses, McGreevey said the plan had not gotten that specific yet.
"We need to clean up Atlantic City," he told the gathering.
At the conference, McGreevey and others portrayed Atlantic City as on the verge of breaking through from a destination where visits are measured in hours to one where the visits are measured in days.
McGreevey also attended the opening of a new hotel tower at Harrah's and the groundbreaking of a much-anticipated retail project, known as The Walk, at the foot of the Atlantic City Expressway. He said he was committed to helping Atlantic City "fully recognize its potential" and position itself to stave off competitive threats from neighboring states, such as the possibility of racetrack slots in Pennsylvania.
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(c) 2002, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News. DAL, MGG, BYD,