Great Expectations for Casino-Hotel, Revel
by robert strauss
Barely 10 square miles and surrounded by water, its resident population split between the wealthy and the poor, Atlantic City continues to serve up fantasies. It was the home of America's first major Boardwalk, constructed in 1870; the Monopoly game board; and the most famous beauty contest of all, Miss America. Business magnates and showgirls, families with wide-eyed kids, honeymooners and high-school sweethearts, body surfers and sun worshippers—all have come to Atlantic City to salve their dreams.
This time around, the dream comes in the form of a shiny, curvy, modernistic palace near the bend in the Boardwalk. Revel is the second-tallest building in New Jersey, dwarfing the nearby icon of the city, Absecon Lighthouse. Atlantic City partisans, even Revel competitors, dream that the new casino-hotel will lead the city out of the economic slump that has slowed growth in the past half decade.
"I hope Revel is spectacular," says Don Marrandino, the eastern division president for Caesars Entertainment, which owns four casino-hotels in the city (Harrah's Resort, Caesars, Bally's, and Showboat). "If it can draw people into the city, if we can grow the entire pie—well, as the saying goes, a rising tide lifts all boats."
There is no question Atlantic City has suffered from one of those dreaded perfect storms. All seemed bright when the last of the city's new casinos, the Borgata Hotel Casino & Spa, came online in 2003. Its glitz along the redeveloped Marina District caused every other casino to step up its game: new restaurants, new hotel towers, new beach bars, new downtown and Boardwalk shopping. The city put on aftershave and designer duds and welcomed the well heeled and families alike, a combination it had not seen since those halcyon "Boardwalk Empire" days.
The recession and the advent of legalized gaming in surrounding states, particularly Pennsylvania, put the brakes on Atlantic City's growth. In 2006, Atlantic City casinos had revenues of $5.2 billion, but by last year, that was down to $3.3 billion. Mid-decade a number of companies had plans to build megacasinos, from international names like MGM and Pinnacle to local consortiums. Only Revel made it through the morass—and it might have stayed a half-built shell had it not secured a $1.2 billion loan.
That loan was the crux of the hoped-for turnaround. The Christie administration made Atlantic City a poster child for what the governor believes to be positive intervention. Several bills Christie passed this past year brought about deregulations for casinos (electronic gaming rules, for example) and moved responsibility for the main tourist district from the state-run Casino Control Commission to the Casino Reinvestment Development Authority (CRDA). Since 1984 the CRDA has invested $1.5 billion into hundreds of projects, from housing developments to shopping centers; moving forward, $30 million given to CRDA by the casinos will be earmarked for the newly formed Atlantic City Alliance, a nonprofit entity charged with marketing and promoting the city as a resort destination.
"There have been enough plans on the shelf here to wallpaper a small hotel," says Curtis Bashaw, a former CRDA executive director who owns the one noncasino luxury (and hip) hotel in the city, The Chelsea. "What really is needed is leadership that sells a vision. We need something to rally around and then just do it. It is time for action, not words."
John Palmieri is the man Christie chose to provide that leadership. Palmieri grew up in Hoboken when it was "like On the Waterfront, not chic," he says. He has been in charge of redevelopment in a passel of larger cities—Providence, Charlotte, Hartford, Boston—but when Christie interviewed him for the Atlantic City job, he says, "I knew it was the place for me. There is an exciting future here."
Even in its down period, Atlantic City's business statistics are impressive. More than 101,000 people—about two percent of all New Jersey workers—are employed by the casino industry and its ancillary businesses, according to a report from the Center for Urban Policy Research at Rutgers University. Close to 30 million visitors come to Atlantic City every year, about a third of all New Jersey tourists, and they spend billions of dollars there. With the addition of Revel, there will be just shy of 20,000 hotel rooms in the casinos—not nearly enough, according to tourism officials, but still more than anywhere else along the Shore.
So it is no wonder that Christie wanted to make a splash with the new tourism district, which essentially puts into CRDA's hands some functions that used to fall on the city itself. A quarter of Atlantic City's 40,000 residents live below the poverty line, placing a heavy burden on city services. Initially, Mayor Lorenzo Langford fought these changes. "Mayor Langford was understandably upset about the takeover of the tourist district by the state," says Marrandino. "He knows that the state is pouring resources in, so it will benefit everyone. We are all glad he has dropped his anger about it and is doing his best to make things better all around."
Joe Lupo, senior vice president of operations at the Borgata and a long-time advocate of uniting various parties in the city, agrees that everyone in Atlantic City will reap the rewards of these drastic changes. "The majority of the improvements are going to be around the Boardwalk and downtown, so they don't immediately impact the casinos, like us in the Marina District," says Lupo. "But that doesn't mean we aren't for that. If we have a safer city and more amenities everywhere, we will benefit just as much. After all, there were $700 million in improvements at other hotels after Borgata came in. That only helped make people want to come to the city, and I hope the work in the tourism district will do the same again."
To that end, Borgata recently announced a $50 million upgrade project for all of its 1,566 guest rooms. Across the Marina, the Golden Nugget took the reins of the former Trump Marina on May 24, 2011, beginning a gradual $150 million renovation to transform the entire casino and hotel. "The property has been completed redefined," says general manager Tom Pohlman. "We felt there was an opportunity to develop a property which was depressed and neglected into one that was going to be profitable." The reinvention includes new restaurants, several bars, entertainment venues (a feature it previously lacked), a $6 million spa and retail corridor, as well as several covetable cabana hotel suites, each complete with a private hot tub and bordering the new rooftop pool.
ILLUSTRATIONS BY DANIEL O'LEARY