Atlantic City bets big on development

In April, casino operators and business owners told NJBIZ about how they continue trying to recover time, momentum and business lost from the multi-year pandemic. Now, May gaming numbers, which the Division of Gaming Enforcement released June 16, show a continuation of an overall pattern of recovery.

“Atlantic City is off to a great start for the summer,” said Jane Bokunewicz, faculty director, The Lloyd Levenson Institute of Gaming, Hospitality, & Tourism at Stockton University, noting the April brick-and-mortar revenues being up 13.3% over pre-pandemic 2019.

“This is certainly a pivotal moment in Atlantic City’s history,” she added. “As part of their pandemic recovery, the city’s casino operators have committed to significant capital improvements which will not only expand the resort’s offerings but help them remain competitive in the region.”

Bokunewicz

And as the weather continues to warm and travel picks up, “We should expect to see brick-and-mortar gross gaming revenue numbers gradually increase month to month as we head into the peak summer season,” Bokunewicz said.

She noted that while the current economic conditions may affect the busy season, that is not being reflected in the early data. Factors that contributed to increases in revenue last year – like pent-up demand and increased discretionary spending money because of COVID-19 subsidies – may be offset this year by inflation and higher gas prices, however we are not yet seeing evidence of this impact. in the spring revenue numbers,” Bokunewicz explained.

In May, Bokunewicz moderated the 14th Annual Jersey Shorecast panel, which featured area experts and leaders to discuss this summer season. While the panel predicted a robust and strong shore season, they did have concerns about the economic headwinds businesses and consumers are facing.

“We have concerns about gas prices,” said Sharon Franz, sales and marketing director at Steel Pier in Atlantic City. “We have concerns with products and services going up. We are trying to think out of the box to get people here.”

Atlantic City

Despite myriad challenges facing the city, the focus locally remains on attracting more visitors while building on the spring momentum with new projects generating buzz. Still, Sean Pattwell, executive director of the Casino Reinvestment Development Authority, said that as in many areas around the state, hiring is a major hurdle. – MEET AC

Another major concern across-the-board right now for businesses, and not just in Atlantic City, is the labor market. Bokunewicz noted that staffing shortages are likely to continue to affect this summer but may be mitigated by the return of foreign workers.

Pattwell

Sean Pattwell, executive director of the Casino Reinvestment Development Authority, told NJBIZ that hiring is a major hurdle. “The biggest challenge this summer has been adequately staffing hotels, casinos, restaurants and other outlets as the Tourism District attempts to offer visitors a world-class experience when visiting Atlantic City,” Pattwell said. “The CRDA has supported many job fairs hosted at the casinos/hotels as well as the Casino Association and Division of Gaming Enforcement.”

And the issue may be exacerbated by an ongoing labor dispute between casino operators and members of Local 54 of Unite Here union. Labor contracts are up between the union and eight of the city’s nine casino operators. A strike or failure to reach a new deal could affect the Independence Day weekend as well as the rest of the summer.

Despite myriad challenges facing the city, the focus locally remains on attracting more visitors while building on the spring momentum with new projects generating buzz. “Those 100 days of summer, we have to absolutely maximize, put our best foot forward and really nail it,” said Jim Ziereis, vice president of sales for Caesars Atlantic City region, during the Shorecast panel.

The CRDA has a mission to maintain public confidence in the gaming industry as a unique tool of urban redevelopment for city, to directly facilitate the redevelopment of existing blighted areas, and to address the pressing social and economic needs of the residents of the city of Atlantic City.

Caesars Atlantic City lobby

Rendering of Caesars Atlantic City’s planned upgrades for the first-floor hotel lobby. – CAESARS ENTERTAINMENT

Unveiling

Caesars Atlantic City is getting a facelift — a $200 million one. To read more and to see a slideshow of the planned upgrades, click here.

“The CRDA, through its shared powers of planning and zoning with the city, uses casino reinvestment as a catalyst for meaningful, positive change and in doing so, the CRDA has positively altered Atlantic City’s residential, commercial, cultural, and social landscape, while financially supporting quality-of-life improvements efforts throughout the city,” said Pattwell.

Pattwell pointed to several exciting projects taking place throughout the Tourism District including Ocean Casino Resorts $85 million property reinvestment, which includes 460 new rooms and suites; Bally’s commitment to spending $100 million to upgrade Bally’s Atlantic City, which includes 750 renovated rooms, a redesigned hotel lobby and bar and indoor-outdoor entertainment venue, “The Yard”; Caesars Entertainment investing $400 million into its three Atlantic City properties, Harrah’s, Caesars and Tropicana, with an expected completion in 2023.

Hard Rock Atlantic City

Hard Rock AC is reinvesting $20 million in capital improvements in the resort town. –

In addition, Hard Rock Atlantic City is reinvesting $20 million in capital improvements that include suite renovations, a new Starbucks, more slots and table games, a new dining outlet, and a refresh of beach amenities; Resorts is renovating its rooftop pool and investing $5 million into new table games and slots; and Showboat is opening a new go-kart racetrack and entertainment center on the old casino floor, as well as breaking ground on its concept, ISLAND Waterpark, a $100 million project set to splash into Atlantic City in 2023

“A single project alone has little chance of turning the tide for the city, but together this upwelling of reinvestment and development, if sustained, could truly make a difference,” said Bokunewicz. “That is exciting.”

Pattwell said some of the non-casino-related projects happening around the city, include AtlantiCare breaking ground on a $38.3 million Medical Arts Pavilion, for which the CRDA donated land valued at $3 million. And Stockton University broke ground on Phase II of its Atlantic City Campus, which will feature a residential dormitory expansion and is set for completion in 2023.

The CRDA has continued to support mental health initiatives, fight homelessness and human trafficking and improve job training programs, according to Pattwell.

He cited a pilot program with the Volunteers of America Human Trafficking, a grant agreement with the Community Food Bank of New Jersey, and a community development grant being awarded to NAN Newark Tech World to administer the Leaders in Training Youth Development Training Program.

New frontiers

Pattwell also said the city is gearing up for the boom expected with offshore wind. “Atlantic City will play a big role in the offshore wind energy industry,” said Pattwell. “Atlantic Cape Community College plans to open a wind energy workforce training center on its city campus, and wind developer Ørsted hopes to start work in 2022 on a maintenance and operations center in Atlantic City to support its offshore wind projects in the area.”

Atlantic City has bet big on another sector that is in its infancy but expected to rapidly grow here in the Garden State: legalized cannabis.

“While some local municipalities have decided to pass on cannabis, Atlantic City leaders have strongly supported expansion from medical to recreational cannabis sales and use,” said Bokunewicz. “Six licenses are planned for Atlantic City. Because cannabis is still not legal on the federal level casinos that own properties in multiple states are prohibited from hosting cannabis operations. This provides opportunities for entrepreneurs and small business owners to capitalize on this emerging industry, diversifying tourism offerings in the city and potentially attracting new visitors.”

Stockton University in Atlantic City.

Stockton University’s campus is a major component of the effort to diversify Atlantic City’s economy. – STOCKTON UNIVERSITY

Bokunewicz said she is also keeping a close eye on e-sports, another exploding sector that has held events in Atlantic City. “E-sports tournaments, which often attract thousands of in-person viewers, provide an opportunity to draw a new demographic of visitors to Atlantic City and expose them to all the city has to offer,” said Bokunewicz. “The Esports Innovation Center at Stockton University can be a catalyst for growth in this area.”

Meanwhile, developers have proposed projects to redevelop the South Inlet, Bader Field, and other spots around the city. Earlier this month, Bader Field played host to nearly 14,000 people for the Atlantic City Beer and Music Festival.

And last month, the Senate unanimously passed a measure that would pave the way for a long-anticipated transportation line from Atlantic City International Airport to the Tourism District. The bill, which remains in the committee on the assembly side, would ease restraints on how the CRDA can spend money.

“Visitors from outside the area can easily book a flight to the city but getting to and from the casinos and Tourism District is another story,” said state Sen. Vince Polistina, R-2nd District, who sponsored the bill. “This bill would authorize the CRDA to work with the New Jersey Transportation Trust Fund Authority and other entities to help develop a transportation solution.”

Pattwell said he could not comment on the pending legislation.

“Long-talked about projects to revitalize Atlantic Avenue and the city’s Tourism District and leverage underutilized assets like Bader Field and The Atlantic City International Airport seemed to have made encouraging progress,” said Bokunewicz.

And last month, Atlantic City received a $6 million federal grant to support the Atlantic City Boardwalk Revitalization Project. The grant, which is funded by the American Rescue Plan, will provide for the demolition and reconstruction of 1,200 feet of the boardwalk.

“I am grateful to our federal partners for their support of my administration’s ongoing efforts to promote economic development throughout our state,” said Gov. Phil Murphy.

“With millions of visitors flocking to our beaches every summer, tourism is a meaningful component of the Jersey Shore economy. Improvements to the Atlantic City boardwalk will encourage further tourism and bolster local businesses in this vibrant city.”

Because of the uncertainties in the national and global markets, the state of play for Atlantic City during such a crucial summer is a complicated one. “As referenced earlier, significant challenges facing the city in summer 2022 will likely be offset by other market factors,” said Bokunewicz. “The ultimate outcome is still very much unknown and dependent on conditions beyond the city and its immediate market.”

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