By Robert Strauss | April 20, 2015 | Lifestyle
With local entrepreneurs and national corporations alike scoring shuttered casinos and beachside properties for a steal, and still-thriving gaming resorts investing millions in renovations, Atlantic City, the beleaguered playland by the sea, is poised for yet another comeback.
A London Eye-type observational wheel, now under construction, will crown the revamped Steel Pier as the centerpiece of the new Atlantic City.
When Bart Blatstein and Anthony Catanoso were young, it was a wide-eyed treat for each of them to come to Atlantic City. They came from opposite directions—Blatstein’s family trundled down from Northeast Philadelphia, while Catanoso’s made the short trip from North Wildwood—but both vividly recall the excitement that surrounded a jaunt to the Eastern Seaboard’s most historic vacation spot.
“My parents would rent in a boarding house or motel—not Teplitzky’s, which [was] far too expensive,” says Blatstein of the hotel on what was dubbed the “Jewish Riviera” in the mid-20th century. “I would go to the Steel Pier to see Motown groups whenever I could. It was exciting.”
Music was also a big part of Catanoso’s experience. “I saw the Supremes in 1968, when I was 10 years old. Or maybe we would see a first-run movie, which was not playing in Wildwood. Even when I had to go there to go to the doctor’s, we would do something special,” Catanoso recalls. “Atlantic City was just unique.”
These days, Blatstein and Catanoso are neighbors of a sort in Atlantic City. Catanoso bought the Steel Pier in 2011 after renting it for 20 years, while Blatstein acquired The Pier Shops at Caesars—in its heyday the Million Dollar Pier and a competitor to the Steel Pier—in October for $2.5 million, a steep discount from its $187 million appraisal less than a decade ago.
The headlines of doom and abandonment in Atlantic City trouble Blatstein and Catanoso, who recognize the enduring potential of this iconic beach town. While four casinos closed in 2014, some of the properties already have second acts in the works. Showboat was purchased by Stockton University for $18 million and will be transformed into a beachside campus. Revel Casino Hotel, the largest and newest property in Atlantic City, still awaits a buyer, following a string of prospects that includes real estate mogul Glenn Straub. As these ownership transitions get under way, there are countless other projects that are quietly churning in this city of about 40,000—and all of their purveyors have conspicuously rosy outlooks.
This optimism may be due to a successful summer season in 2014, when the beaches belonged to country music superstars Blake Shelton and Lady Antebellum for two days in August; an estimated 60,000 fans showed up each day for the pair of free concerts. Miss America returned to its hometown in September after a few years in Las Vegas. And major events like the annual Thunder Over the Boardwalk air show and an international sand sculpting competition attracted tens of thousands of revelers. Those kinds of numbers tell Atlantic City businesses there are still seats to fill, rooms to book, and money to spend.
The Borgata has continued to attract guests by undergoing constant renovation and expansion over the last decade.
The scope of projects ranges from retail to residential and everything in between. Resorts Casino Hotel is building a 12,000-square-foot conference center where its buffet used to be, while over at the Marina District, Harrah’s is constructing an even bigger one, priced at nearly $126 million. The Tropicana and the Borgata have major upgrades and renovations going on, and the Claridge has split off from Bally’s to go boutique, renovating its rooms into replicas of those that existed when the hotel opened in the 1920s, plus incorporating new restaurant and bar concepts. Bass Pro Shops is moving in with a megastore to the successful and ever-expanding Tanger Outlets. There are even developers exploring new residential projects for the city, something unheard of even in some of the more glorious times of the casino era.
“I think this means that long term, it is clear that Atlantic City’s future goes well beyond gaming, and it must,” says Michael Pollock, managing director of the Spectrum Gaming Group, who covered the casino boom in its early years as a reporter for the Press of Atlantic City. “Anyone, starting in 1978 and going to the present, would have recognized Atlantic City’s business model, if it was only gaming, could not survive. We always assumed that casinos would be a tool to help redefine Atlantic City, but that would not be an end in itself. That is what is finally playing out to a certain extent.”
Adds Pollock, “Atlantic City needed to reinvent itself then and needs to now. This is not a new need. This is not a new concept.” At his State of the City address in mid-February, Mayor Don Guardian seemed slightly more upbeat amid positive strides for his struggling resort town. “The light at the end of the tunnel now is so much brighter than it was before,” he said.
That metaphorical tunnel may shine brightest at the actual one, the Atlantic City-Brigantine Connector. Here, the two-lane route takes drivers underground from the Expressway to the Marina and AC’s golden child, Borgata Hotel Casino & Spa (the property has served as the standard of casino hotels here since opening in July 2003). The only way to stay there, says Joe Lupo, Borgata’s senior vice president of operations, who has been with the company since it opened in Atlantic City, is to spend money on upgrades and maintenance constantly.
“Going back 12 years, we did a lot of research and we realized that we would have to always improve the property,” says Lupo. “We expanded in 2006 and [added] the Water Club in 2008, [followed] by a $50 million room redesign in 2012. We always have $25 million ready to do maintenance, to keep things fresh and clean.” Lupo says the Borgata is spending $10 million this year redesigning suites, remodeling the front desk, and doing a minor update of the spa. It is not a huge undertaking, he explains, but it is an indication that Borgata, too, thinks Atlantic City is worth investing in. In March, Borgata announced plans for Borgata Festival Park, a new outdoor concert venue opening this summer. There are also plans to build a new nightclub later this year.
Tropicana’s 500-room North Tower is undergoing a full remodel.
The same goes for Tropicana Casino & Resort, according to its chief executive officer, Tony Rodio. The casino, known for its access to the boardwalk and The Quarter, which marked 10 years in late 2014, has more than $35 million in projects going, from renovating its 500-room North Tower, to putting in the first public fitness center (one not restricted to hotel guests) attached to a casino, to adding more retail space facing out onto the corner of Pacific and Morris Avenues.
What Rodio is most excited about, though, is a new sound-and-light element along the casino’s boardwalk façade that should be fully operational by June. There will be high-definition screens showing either commercials or entertainment videos out to the boardwalk 24 hours a day, as well as a sound and light show that will go off—in various forms and types of shows—several times each evening. “If you are in Ventnor, two miles down the Boardwalk, you may not see the show, but you will see the light,” says Rodio. “We can create our own content. On July 4, maybe a patriotic display—anything, really.”
“It is important for us not to sit on our hands now,” he adds. “We have lost a lot of hotel rooms, but there is still opportunity to grow. We certainly understand the challenges, and they are not insignificant, but you have to be aggressive and do new things when you can.”
Catanoso, whose Steel Pier is just a few blocks north of that upcoming sound and light show, is also of the expandor-languish mind-set. He grew up near the Wildwood boardwalk and saw that each year there would be something different, creating a feeling of both nostalgia for what remained and excitement for what was to come.
Steel Pier’s big item this year will be an observation wheel: Imagine a Ferris wheel with glass cabins going 200 feet in the air for a 15-minute ride—much like the London Eye on the south bank of the River Thames, which transformed central London. Catanoso is adding 30,000 square feet of decking to the pier to help accommodate the wheel and move the big sling-shot ride—one of 21 already there—from the back of the pier to the front. It is a $14 million project that, he says, will assure him having a 10-month season, leaving out only the dead of winter.
“Atlantic City is a unique place with a lot of potential and great raw amenities that can’t be duplicated,” he explains. “We get 26 million visitors a year, and we are still the second-largest gaming market in the country. Yes, maybe the market for gaming will shrink a little bit, but this is not a bleak outlook. You can see that I am spending money, and there will be even more non-gaming things coming.”
The more unusual “non-gaming thing” in Atlantic City is Stockton University’s takeover of the former Showboat. Stockton already had a presence in Atlantic City at the old Carnegie Library building, but this will be nothing short of a transformation of the university, with 1.7 million square feet of new space (the main, inland campus has 1.8 million square feet). Stockton will leave one tower with 479 rooms as hotel space, which will be managed by a hospitality operator, but use the rooms in the other two towers for student residences. The casino floor areas will become classrooms, labs, and offices. The university will keep the 2,500-seat theater intact for its arts programs.
“This is going to make Stockton a hot item in education,” says school President Herman Saatkamp, who hopes the student body will become a bit larger than its current count of 8,700 full-timers. “There is no university, I am sure, with a campus on the boardwalk and another one in a beautiful rural area.”
Harrah’s new conference center will bring more than 125,000 square feet of meeting space to the Shore before the end of the summer.
Harrah’s Regional President Rick Mazer is ecstatic about all of it. His hotel’s next project is a 250,000-square-foot conference center, which will feature meeting spaces covering half of that area, plus two large ballrooms. He has already booked his first conference for September 6, just after Labor Day. “Boardwalk Hall and the Convention Center are good for boat shows and big trade shows, but Atlantic City needs ongoing conference business to really thrive,” says Mazer. “I do believe this is part of the transformation of Atlantic City. This is the type of business that hasn’t existed here. We will now be even more on people’s radar for convention business.”
Blatstein, who transformed Northern Liberties in Philadelphia with the Piazza development, says he has a chance to do the same with the moribund Pier Shops. “It is a cool property with spectacular beachfront real estate,” he says. “No matter what the bad news says, this is in much better shape than Second Street and Girard Avenue [was] when I went there to do the Piazza.”
“I don’t think anyone is looking for another casino,” says Blatstein, who adds that the revamped Pier will have entertainment, restaurants, and upscale retail developed over time. “I wouldn’t be down here if I didn’t believe in it. It’s a great time to be building in Atlantic City.”