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Faced with $1 million Bond Payment Deadline,
Hard Rock International Scraps Atlantic City Casino Project

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

Sept. 12, 2012--Hard Rock International has withdrawn plans for a new casino hotel in Atlantic City, dropping out the day the development group was facing a deadline for a $1 million payment to the state for the project.

"Hard Rock International has decided not to move forward with an application for a potential hotel/casino development in Atlantic City, due to current market conditions. We have been evaluating Atlantic City as a prospective location for a hotel/casino development and have not eliminated this location for a future endeavor," the company said in a brief statement this morning.

Today was the deadline for Hard Rock's developers to post a $1 million bond and submit construction timetables for a project that had already been delayed for months.

As of Tuesday, the New Jersey Casino Control Commission was still waiting to hear from the development group, a partnership between Hard Rock International and the New York-based financial firm Och-Ziff Capital Management.

This morning, CCC chairman Matthew Levinson said in a statement that Hard Rock notified the board that it is still considering Atlantic City for a possible "future endeavor."

"As we move forward in remaking Atlantic City into a full-scale destination, the market will rebound here and that will rekindle interest in developing innovative new resort properties here." Levinson said.

In March, the commission gave Hard Rock's developers a six-month extension -- until today -- to make the $1 million bond payment, as well as submit a schedule for starting and completing the project.

Earlier this year, Hard Rock officials explained they were encountering delays in securing a New Jersey environmental permit for construction of the beachfront project and needed more time.

Hard Rock had proposed building the first of two, smaller-scale casinos approved for the Boardwalk. Gov. Chris Christie signed legislation in 2011 allowing those projects to have as few as 200 rooms, compared to Atlantic City's previous minimum threshold of 500 rooms for casino construction.

Smaller casinos are seen as a way to bring new jobs and construction to the struggling Atlantic City market, while making it easier and cheaper for developers to build.

Hard Rock's developers had said they would start with 200 rooms, but would add a second phase consisting of an extra 650 rooms. The project was proposed at the foot of the Route 40 entryway, at the southern end of the Boardwalk.

No other developers have stepped forward yet to build the second smaller-scale casino.

Mayor Lorenzo Langford said he wasn't surprised by Hard Rock's decision, given the poor economy.

Neither was state Sen. Jim Whelan, who was the author of the bill that allowed for smaller casino projects.

"It's just disappointing, but not surprising giving the market conditions here in Atlantic City and the overall national economy," said Whelan, D-Atlantic.

"It says the market isn't there right now to support the development of any new casinos, whether it's a small casino or a larger casino."

Instead, Whelan said that what is happening in Atlantic City has more to do with potential sales and development of new partnerships with existing properties.


(c)2012 The Press of Atlantic City (Pleasantville, N.J.)

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