Friday, March 27, 2015

A City Way, Way Down on Its Luck

People thought hub and I a bit nuts when we moved to the great state of New Jersey, a.k.a. Chris Christie's Kingdom. But we chose the shore area and it is, as our town slogan suggests, shorely the best.

Our town is next door to one of the country's most economically distressed cities – Atlantic City, a place where current events are more interesting than any fictional story.

The intrigues of financial magnates and petty politicians, with the help of a vast legal system eager to devour multitudinous legal fees, play out every day in America’s favorite playground, a city that cannot seem to bounce back from bad luck.

A sample of the latest machinations plaguing the city -

Wall Street financier Carl Icahn purchased the Trump Taj Mahal in Atlantic City and proceeded to fight with the union (over pensions, layoffs, pay, healthcare), state politicians, and other casino barons (mine is bigger than yours – casino, bank account, bullying tactics…).

Another AC casino empire, Caesars, sold one of its properties, the Showboat. A provision of the sale specified the site could not be a casino in the future. Stockton University purchased the property, planning to develop it as an urban campus, and operate the hotel during the summer season.

Icahn’s Taj Mahal is next door to the Showboat. He now insists the Showboat property be reinvented as a “first-class casino hotel” as stated in a legal document dating to the 1980s.

Stockton was assured the covenant was immaterial.

Icahn insists it is very material.

Meanwhile the Trump Plaza, a dump in the middle of Casino Row, sits empty…the Atlantic Club on one end of the Boardwalk remains vacant…on the other end of the Boardwalk the Revel (a majestic casino hotel that never made a profit during its 2 ½ years in business) lies dark and empty next to the Showboat.

AC is the home of many closed establishments and bankrupt companies, past and present.

Currently –

Caesars’ parent company is in bankruptcy.

The Revel is in bankruptcy.

The Taj Majal is in bankruptcy.

See a pattern here?

A Florida developer wants to buy the Revel. The bankruptcy court said Go ahead! Then Revel tenants rebelled. They invested millions in their businesses (nightclubs and restaurants located in the hotel), and do not want to be evicted – which is what the Florida guy plans on doing.

Another developer wants to revamp a shopping mall on the Boardwalk. Caesars placed legal barriers in the way.

In AC nothing happens easily or quickly. Too often nothing happens. Except decay.

The city is in dire financial straits. No one wants to pay taxes. Casinos demand tax rebates, the numbers of unemployed laid off as casinos closed (8,000 in 2014) have no money, property values plummeted and city revenue suffered.

Can the decline be reversed?

Can AC morph into a dynamic center with cultural and educational amenities as well as hotels, casinos, entertainment and restaurants before global warming sinks the city?

Can businesses steer clear of bankruptcy?

Will gentlemen’s clubs and pawn shops be the only businesses to survive?

Atlantic City can't get a break.

Hasbro, the company that makes Monopoly, recently threw the city out the window. Two new versions of the game include one with American cities (excluding AC) and one with world cities.

Stay tuned for future developments as financiers and developers play with AC properties as if they really were plastic game pieces…

3 comments:

  1. I don't think AC ever fulfilled all the promises that were made when it became a gambling city. A ride around town in the heyday of the casino boom still showed dilapidation and seedy neighborhoods. Perhaps their greed became their demise. I know many people in the outlying areas who lost jobs with all the closings, and unless things pick up again, they'll be in dire straits. Do you think the downfall is due to lack of interest or possibly the new casinos in Philly?

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  2. I have no interest in gambling and casinos, but I do hate to see a city just decay. I will have to remember about this for the next time I hear the Donald spouting about he is the great best hope for the country and should be elected president.

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  3. Trump and his pals are awful. Atlantic City was once a nice place, now its as you put it, "a dump" thanks to these high rollers who suck the life out of something and leave it dying. I know bus loads o seniors from around here used to take busses to Atlantic City but no more.

    Everyone I knew in NJ has migrated owing to the high taxes, or died, including the Ex who lives in SC a state that fits his Conservative values.

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