A plan for a .17 billion hotel, casino and convention facility to be located at the Meadowlands Sports Complex in East Rutherford New Jersey has been unveiled as talk of ending Atlantic City’s monopoly on casinos in the state has begun to spread.
The Meadowlands Regional Chamber’s proposal—which it calls a “vision” plan—updates a 2011 plan that also included a casino, but did not gain traction as state officials focused on reviving Atlantic City.
“This is not a plan to create a district that competes with Atlantic City,” Jim Kirkos, chief executive of the business group, said as the plan was announced. “Since the Meadowlands Sports Complex was built, the population in the surrounding region has grown, but does not have anything compelling enough to keep them here when they are spending their discretionary income.”
The plan includes:
• A pair of hotels with a total of 2,000 rooms, one near American Dream Meadowlands (the former Xanadu) and the other near the Meadowlands racetrack.
• A convention center of 700,000 to 1 million square feet.
• Four unspecified casino-gambling sites which could be located each hotel, the track, and at the convention center.
• A 1.5-mile people mover to transport visitors between the various venues at the Meadowlands and increased parking
The plan calls for a mix of private and public funding, but did not specifically break down how the project would be paid for.
The proposal could gain new life as Atlantic City continues to falter. Three casinos are set to close at the end of the summer in the resort, which has seen a steady decline in casino revenue since 2006.
In 2011, Governor Chris Christie gave Atlantic City an unofficial five years to turn itself around, but with the casino closings, he and other key legislators have said it may be time to expand casino gaming in the state.
Still, any change in the state’s casino laws—which only allow casinos in Atlantic City—would require approval by the state’s voters. Such a referendum could go before voters as early as November 2015. A poll shows a narrow margin of voters opposing such a gaming expansion, but no campaigns have been launched one way or another.
That, however, has not stopped the proposals for new casinos. Recently, a massive $4.6 billion casino and entertainment project was proposed for Jersey City.
And now, a New Jersey Republican state senator is also proposing putting video lottery terminals at the state’s four horseracing tracks, reviving another old proposal to legalize the VLTs at Monmouth Park, Freehold, Meadowlands and Atlantic City Racecourse.
The constitutional amendment was introduced by state Senator Joseph Pennacchio and would have the terminals wagers overseen by a consortium of Atlantic City casinos. And since the lottery is approved in New Jersey, some legal experts contend no constitutional amendment is necessary.
Profits would be divided with 50 percent going to the state to shore up public pensions or satisfy pension debt service. The casinos would receive 40 percent with the remaining 10 percent earmarked for “infrastructure and entertainment enhancements” in Atlantic City.
‘‘There is an inevitability to racetrack racinos in New Jersey,’’ Pennacchio said in a statement. ‘‘Why not use the moment to strengthen and encourage Atlantic City and its casinos as well as increasing the solvency of our public workers’ pensions?’’
Atlantic City Summit
Meanwhile, Governor Chris Christie used to have to speak to a lot of state pension holders at his regional town meetings. Now, Atlantic City casino workers about to lose their jobs have taken center stage at the events.
Speaking in Ocean City New Jersey—just south of Atlantic City—Christie told casino workers that the state will work to help them.
“I am engaged, I am working and we’re going to do everything we can to try to make sure that we keep you safe and secure and employed,” Christie said.
Three Atlantic City casinos—Revel, Showboat and Trump Plaza—are scheduled to close at the end of the summer. Revel will close September 2 and Showboat is scheduled to close on August 31. Trump Plaza will close September 16.
The three closings will put more than 6,500 casino workers out of their jobs.
There has been some hope that at least two of the three properties might be sold before their closing dates, but Revel was unsuccessful in finding a buyer at a bankruptcy auction and Showboat casino has shown little progress in any negotiations. Trump Plaza was never considered close to finding a buyer, although a purchase agreement by California’s Merulo Group was cancelled last year after mortgage-holder and Tropicana owner Carl Icahn objected.
The assembled workers held signs and chanted saying they want the state to explore whether the Casino Control Commission or state Division of Gaming Enforcement can force the casinos to stay open—at least for a time—while they continue to look for buyers.
Christie had to tell the workers that the state simply can’t force the casinos to stay open.
“I cannot and will not order any private enterprise that they have to stay open. I just can’t do that and philosophically it doesn’t make sense,” Christie said. “I can’t force someone to continue to lose money.”
But Christie also reaffirmed his support for the resort.
“I’m going to work as I hard as I can with you and for you to make sure that you’re working. And that’s the best that we can promise each other,” he said.
At a later town hall meeting in Long Branch New Jersey, Christie said he believes Atlantic City can survive.
“We can’t look at this as a disaster. It’s not a disaster,” he said, saying the city needs to transform itself into a full-service resort town.
Christie has previously announced that he will hold a summit Sept. 8 with political, business and labor leaders, to discuss Atlantic City’s future.
“The only way we’re going to fix this is for all of us to get around a table and come up with solutions,” he said. “We can’t wave a magic wand.”
Workers Rally
With so many jobs about to disappear in the city, however, workers continue to try and save their livelihoods.
Casino workers have held several rallies—along with appearing before Christie—to try and keep the casinos from closing. Now, they’re just trying to figure out what to do next.
Area clergy members and the city’s main casino workers union recently organized a rally and prayer service for workers who will be jobless.
“We’re praying for God to open new doors to them,” Rev. Eric McCoy, president of the Atlantic City Fellowship of Churches told the Associated Press. “We have hope that God is about to restore to them whatever his plan for them was. He had plans for us before casinos existed, and he’ll have plans for us after they’re gone.”
Maria Logan, a union worker at the rally told the wire service that the workers are facing a major life challenge.
“This isn’t play. People are losing their homes and the only means of supporting their families,” she said. “This is very scary for people who are in a situation they never expected. Some people put their entire lives and souls into these jobs, and someone just comes along and snatches it away from you. It is devastating.”
The rally also noted that the casino closings and job losses will have an effect on the entire southern New Jersey economy.
“As these casinos are shuttered, it will have a domino effect up and down our streets and our communities,” said Bishop James Washington, one of the clergy in attendance. “Our hearts are heavy. Multi-million-dollar corporations are about to turn their backs on these good people.”
Officially, however, the DGE has now given approval for two of the casino closings.
Showboat will close at 4pm August 31. The DGE order addresses the logistics of the closing, including taking an inventory of alcohol and slot machines before Caesars can make transfers its other Atlantic City casinos. The order also allows Showboat chips to be redeemed at the other Caesars properties—Harrah’s, Bally’s and Caesars.
Showboat must continue casino-cage operations until 5pm so patrons can redeem vouchers and chips. Poker operations are scheduled to end at 6am August 30, the order said.
Revel has also been cleared by the DGE to close. The casino will cease operations at 6am Sept. 2, meaning the property will be open through the Labor Day holiday.
Casino-cage operations will end an hour later so customers can redeem chips and vouchers. Some table games are slated to end Sept. 1, the DGE order said.
Residents Get Tax Help
Meanwhile, residents of the city who have been hit hard by rising taxes as casino taxes plummet got some help from the Atlantic City Council, which approved resolutions to reduce interest non late tax payments.
Through the rest of the year, interest penalties on late tax payments will be halved to four percent on the first $1,500 owed and nine percent on amounts over that. The council also gave residents a full month’s grace period to make payments without interest penalties. Council also approved regulations to allow taxpayers to arrange payment plans with the city.
“Obviously, nine councilmen all voted in favor, and it’s one of the issues as the governing body they can immediately address,” Atlantic City Mayor Donald Guardian told the Press of Atlantic City. “We understand the pain taxes are causing and how tough things are for businesses and residents.”
City residents face a 29-percent increase in the city tax rate as the city absorbs a number of casino tax appeals that lowered tax assessments. The closing of Revel alone could cost the city about 7 percent of its overall tax revenue. That has caused the city’s bond rating to be reduced to junk status.
Those woes could continue. A recent report by Deutsche Bank predicts that by 2017 only six Atlantic City casinos will continue to operate with revenues of about $1.8 billion, down from $5.2 billion in 2006.
The casinos themselves also got some good news as the state DGE has proposed a change in how casinos report financial information on slots and table games.
The change would simply allow the casinos to report on slots and table games as a whole without breaking down how much was made on each specific type of game. The change is seen as bringing the state more in line with other jurisdictions, DGE officials said.
