Thursday, June 4, 2015

Atlantic City: An "On the Street" Perspective

by Brendan Barardo, Erin Smylie, and Tracey Wescott-Cosme
Special Correspondents

In September 2014, the long-standing casino Trump Plaza was shuttered. The casino’s revenue had dropped by 50 percent since 2006, and it’s winnings had fallen by more than 27 percent in it’s first half of 2014. 

In this year alone, the eight casinos left have gained $375.9 million, down 7.2 percent from last year during the same fiscal quarter. This decline is exclusive to New Jersey, and the gambling industry in other states like Nevada, Pennsylvania, and New York are either becoming start-ups to invest or have a flat/increasing rate of revenue. 

Casino competition across the country is high, with 1,400 casinos found across the nation, and 100 found on the East Coast alone. Another impact to Atlantic City was the state initiating online gambling in January, 2011. This seems to have not even put a dent in the funnel money into the state. Money was being put into the casinos and entertainment industry of the city, but did seemingly little to add security and put money into the city itself. 

From the advent of the casinos in 1977 with the Casino Control Act, the industry was mandated to put 2% its revenue gained back into the city and it’s projects. This is through The Casino Reinvestment Act, and is largely managed by a quasi-government agency called CRDA -- Casino Reinvestment Development Authority. 

Recently Governor Chris Christie stated that his first order of business in the restoration of Atlantic City is to “stop the bleeding” and find new ways of bringing life back into the district. New outlets such as Bass Pro Shops have been added within the past year, as well as other businesses to drive customers in and also open up jobs for locals. 

On the street and in the community, there appears to be a different perception.

“Nothing really changed here,” are the words of a cashier working at the Coach Outlet on Arkansas Avenue in Atlantic City. “We get less people who wander in just to shop, but people still come by because this is the only Coach store in the area.” 

Upon being asked if she had any ideas on how the city could reinvent itself, she stated that the shopping district “is fine, it is not the companies that are coming into town that need to change, it’s the districts that are only offered in AC, you know?” This statement indicates what many people interviewed echoed -- that third-party businesses like Coach, Nike, and McDonald's are not the core issue, but the clubs, shows, and casinos may need to reinvent how people are drawn to those spaces. 

“There is no real reason to visit Atlantic City if things keep persisting the way they have,” was another sentiment echoed through various interviews.   The impact has been felt as many jobs have been lost because of the shutdown. More than 1,000 people were given their notice over the shutdown of Trump Plaza, and the Trump Taj Mahal is teetering on the edge of closing as well. With the slow decline in casino closings and an unemployment rate of 17.8 percent since 2012 steadily increasing, finding a job in the city has been tough for locals. 

Atlantic City local Ashley Stuart says that she has little to interest in what happens to the city. 

“Yeah, I’ve been here for about 6 years, but really, it is not by choice.” She stated that it was a financial reason for coming to live in Atlantic City and “if I had the choice, I would get out of this state altogether.” 

Ann Scerino has been a local for 30 years of her life and has been an active in the gambling scene for many years, saying that she “does it for fun and it passes the time in my older years.” It became a shock to her when news got out of the Trump closing, but Scerino is more concerned over what will happen as time goes on. 

“Atlantic City is known for its gambling and fun night-life, and if the city isn’t getting any business and these places start shutting down, then it’s going to turn into another Camden.” Scerino's sentiments give voice to many resident's concerns -- with a decline in tourism, what will keep Atlantic City from becoming another stereotypical rough, gang filled, and crime breeding ground?

Since the decline in revenue in 2006, crimes rates have actually decreased. Recorded theft in the city was 3,148 in 2006, but has decreased to 1,884 in 2012. Auto theft has dropped by more than 100 percent between 2006 and 2012. Why?  

This is occasionally attributed to the decline in tourism, making theft a lot less frequent and harder to commit around locals. Upon being asked how the city could bring new people in, Stuart disputed that as a goal: “Atlantic is a dump and not many people would disagree. I live here because I don’t have any other options outside of moving out of state, and I can’t do that cause I got family here.” 

Showboat casino closed August 31, 2014, 27 years after its opening in 1987. This is one of four Atlantic City casinos that closed in 2014, including the Trump Plaza, The Revel, and The Atlantic Club.  The Showboat's 2,100 employees started to search for new jobs in an already strapped industry.

Can Atlantic City reinvent itself once again?  When the Casinos were established in the 1970’s, the beachfront property was largely ignored, and the businesses focused only on themselves and not on the city. By creating non-gaming attractions on the boardwalk and offering more family friendly options for tourists, the city can have new life brought into it, and hopefully throw some money toward Atlantic City itself, as well as New Jersey.  What about becoming a college town?

 Showboat was purchased by Stockton on December 13, 2014 for $18 million. Stockton used reserved investment funds to purchase the casino and as a result no debt was issued and tuition does not need to be increased, according to reports at the time. The result of these four closings is almost 8,000 people lost their jobs. Some of these people had even been with the casinos since the opening. The Showboat, which will become the Island Campus, will house about 400 students, undergraduate and graduate, starting Fall, 2015.   

Pending board approval, rooms were priced at $4,200 for a single room and $4,000 for a double room. The setup of living at the Island Campus was anticipated to be similar to living at the Seaview, Stockton’s off campus hotel that has two separate wings designated to students. Such a community partner in as a university would breathe new life into the city and bring in young, aspiring students who hope to see Atlantic City succeed. Although Stockton intended to renovate the Showboat and make it a college campus and hotel for students, they ran into some trouble. 

All those plans appear to be in jeopardy as a deed restriction covenant states the property must stay a casino.

The Trump Taj Mahal informed Stockton that it planned to hold the contract made in 1988 between them and showboat that stated these casinos would never run as anything other than casino/hotels. The Taj claims that it is on the brink of bankruptcy and that allowing Stockton to turn Showboat into its next college campus would impact their business in a way that would send them into definite bankruptcy. As a result, Stockton sought to sell the Showboat. 

They found a buyer in Glenn Straub, a Florida developer, and are tentatively selling the Showboat. According to President Saatkamp, who recently resigned, stating poor health as the reason, there is an option “should we want it” that would allow Stockton to lease space from Straub in the Revel for classrooms and residences. 

Walking along the boardwalk on a windy afternoon, John and Laura Wok, were visiting from out of state to gamble. 

“My husband and I visit twice a year from the West, but we didn’t know about the Trump closing down at all.” The couple has made it a tradition to visit the city for its bright lights and attractive shows, but never caught the news that their ‘go-to-place,’ Trump Plaza, had shut down due to the lack of business.

“Laura was looking forward to seeing a couple of comedians and I just wanted to gamble. I mean we still get to do it and all, but if these casinos are shutting down left and right, we won’t have anywhere else to visit,” were the words of Wok after being asked what their plans might include.  Many analysts say a focus should shift towards the Boardwalk and beach to try and bring people back to the city. 

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