New day rising in Atlantic City

New Jersey Gov. James McGreevey took time out from the political firestorm raging around him to sign some important legislation for Atlantic City. The bill will provide about $3 billion in economic aid for the city and enable it to continue its transformation into a destination resort. From the AC Press:

Gov. James E. McGreevey signed legislation Wednesday that will generate billions of dollars in development over the next five years. It is considered the most important economic-aid package for Atlantic City since the Casino Control Act in the 1970s.

In addition to creating thousands of construction jobs, the legislation will serve as a centerpiece of development plans for 2,000 hotel rooms and an array of Las Vegas-style retail and entertainment attractions to help the casino industry fend off competition from Pennsylvania's new slot parlors next year.

"The partnership that we establish here today will ensure Atlantic City's competitiveness well into the next several decades," McGreevey said moments before signing the legislation in front of a cheering crowd at Boardwalk Hall.The ceremony was attended by state lawmakers, labor leaders and about 300 construction workers, many of them wearing hard hats, mud-spattered boots and overalls.

It was the first public appearance for the governor since his stunning announcement Aug. 12 that he is gay, had an extramarital affair with a man and will resign Nov. 15.

McGreevey received a standing ovation after signing the legislation, which consists of two bills. Waving the papers triumphantly above his head, the governor said, simply, "It's now law."

Touting a litany of economic benefits, McGreevey said the legislation creates a partnership between the state and casinos that will bring billions of dollars in jobs and construction projects to the area.

"We have collectively leveraged our strength and ability over the next five years to attract $3 billion in private capital investment to Atlantic City," the governor said.

Supporters said the new laws will complete the economic work started by former Gov. Brendan T. Byrne, who signed the New Jersey Casino Control Act of 1977 to allow legalized gaming in Atlantic City.

"This bill is second in importance only to the signing of the Casino Control Act," said state Sen. Bill Gormley, R-Atlantic, chief sponsor of the legislation.

Besides giving labor unions a boost, the legislative package represents an economic bonanza for the $4.3 billion casino industry. The legislation provides tens of millions of dollars in construction incentives and will also phase out, by June 30, 2009, a 4.25 percent state tax that casinos pay on the free rooms and other "comps" they give to their best customers.

"The tax bill is very important. It stabilizes the industry," said Larry Mullin, executive vice president of the Borgata Hotel Casino & Spa. "Without the legislation, there would be uncertainty."

Mullin said casinos will be encouraged to invest in Atlantic City instead of scouting out opportunities in other markets that already have or will soon be starting legalized gaming.

Borgata, the flashy, billion-dollar megaresort that opened last year, is already planning a $200 million expansion project that will add 600 slot machines, new gaming tables and four restaurants to the property. Mullin said Borgata hopes to take advantage of new state tax incentives to build retail and entertainment attractions.

One of the new bills will funnel $62 million in Casino Reinvestment Development Authority funding into Atlantic City construction projects, including an estimated 2,000 new hotel rooms and improvements to the Boardwalk.

The CRDA, the state agency that uses casino funds for development projects, will set up five new retail-entertainment districts in Atlantic City. Developers will be eligible for $2.5 million in annual sales-tax rebates over a 20-year period for the retail-entertainment projects.

Wallace R. Barr, chief executive officer of Caesars Entertainment Inc., operator of three Atlantic City gaming halls, said his company may now push ahead with tentative plans for a 1,000-room hotel tower atop a $75 million parking garage under construction for the Bally's and Caesars casinos.

For A.C., a $3 billion jackpot

That was the news, now here's the hard-hitting analysis: This is obviously great for the unions and the gaming industry, but I didn't see anything about how this bill would improve the housing stock of Atlantic City. One of the original purposes of casino gaming was to make Atlantic City a better place to live and halt the exodus of the middle class. It seems that this has been completely forgotten; the new goal is to maintain revenues in the face of competition from slot parlors. Talk about collapsed expectations.

Can the city pay Caesars $64 million not to build a hotel tower on top of its new parking garage? Aesthetically, these things are just ugly, and I can't imagine that people spending the night there feel like high rollers: "Yeah, we got a great room over the garage! It was phenomenal!" Right.

As an Atlantic City native, it's great to see all of this development, but it would also be nice to see a little more done to make the city a more attractive place to live. With 50,000 or so casino employees, many of them commuting over an hour each way, there are certainly people who would be well served to live in the city.


Source: Casino [ptz]