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Atlantic City's New Deal Brings Money, Marketing

Tom Condon

December 01, 2011

You gotta love Atlantic City. The small resort city in South Jersey has been up and down more than a journeyman welterweight. This is the town whose streets and landmarks are immortalized on the "Monopoly" board, the town that had, and lost, the Miss America Pageant.

Atlantic City is profiled in the current issue of Governing Magazine, a piece that suggests the city is up against some of the same challenges that Hartford and Connecticut face.

In its belle epoque, three railroads served Atlantic City and grand Victorian hotels lined the famed Boardwalk. Mobsters kept the liquor flowing during Prohibition, so the fun continued.

But things changed after World War II, as they did everywhere. The hotels died out for the same reason the grand hotels along the New England coast closed: cars, highways and changing tastes in vacationing. By the 1970s, Atlantic City was in rough shape. To revive it, New Jersey approved casino gaming there in 1976.

The revival was not immediate. I visited Atlantic City in the mid-1980s. A drab and dying town had been turned into a drab and dying town with eight or nine (now 11) shiny, new high-rise casinos. Against the old buildings they looked like gold teeth in a dead man's mouth.

But in the Clinton prosperity of the 1990s, things picked up. New restaurants, casinos and a new shopping district seemed to portend revival. But in the past decade, it imploded. Total visitors dropped from nearly 35 million in 2005 to fewer than 27 million in 2010. Casino net revenues fell from $5 billion to $3.5 billion in the same period, and were, as they say, still trending negatively.

The twin villains were the recession and the rise of legal gambling in nearby states. Atlantic City is no longer the only gaming in town.

How to respond? A state study commission reasoned that if out-of-state gamblers can stay home and shoot craps, Atlantic City has to broaden its appeal and become a destination resort (something Connecticut's Indian casinos are trying mightily to do). Las Vegas has this figured out and collects nearly 60 percent of its revenues from non-gaming sources. For the Boardwalk casinos, it's about 10 percent.

To become Vegas East, the city needs more conventions, a "clean and safe" tourist district, better transportation and top-flight marketing. Gov. Chris Christie has decisively intervened to make this happen.

Since 1984, there's been an agency called the Casino Reinvestment Redevelopment Authority that has invested a modest gaming tax in housing and other development projects in Atlantic City and around the state. Now, all the money will go to Atlantic City. More remarkably, Christie engineered a transfer of some land use and regulatory authority, including planning and zoning in the Tourism District — more than half the city — from city hall to the redevelopment authority. I don't know of a similar arrangement in the country.

The redevelopment authority will also fund a nonprofit marketing group to sell the city.

To run the redevelopment authority, Christie hired the guy who told him nothing would work unless the Tourism District was clean and safe. That was old friend and good guy John Palmieri, who was development director in Hartford until 2007, when he left to head the Boston Redevelopment Authority.

I talked to Palmieri on Tuesday and he said some of the challenges are similar to those he faced in Hartford. Like Hartford, Atlantic City is the urban core of its region, and has some old and poor neighborhoods with what the cops call "hot spots." Among many other steps, Palmieri said a well-regarded former state police colonel has been brought in to coordinate better enforcement efforts.

Also like Hartford, Atlantic City has a lot of holes to fill, gaps of open space left over from land speculation after gambling was approved. But Palmieri speaks, as Mark Twain said, with the calm confidence of a Christian holding four aces. He's got a development authority with power and money. He's got a huge convention hall and 20,000 hotel rooms. And he's got the one amenity that Las Vegas has not been able to replicate — the Atlantic Ocean.