Gambling Mecca for Day-Trippers
Atlantic City, N.J., now celebrating the 30th year of legalized gambling along its boardwalk, is fighting for its future. Facing stiff competition for the citys bread-and-butter day-trippers, developers are betting billions on new hotel rooms, hoping that the resort can bring in more overnight visitors.
On deck is Revel, a roughly $2 billion beachfront casino by Revel Entertainment Group LLC under construction and targeted to open in 2010, although financing is an issue. Meanwhile, Coastal Marina LLC agreed to buy the Trump Marina Hotel Casino in May for $316 million. Coastal plans to breathe new life into the property with a Jimmy Buffett-inspired Margaritaville theme.
In all, as many as 3,000 hotel rooms are expected to be added this year, expanding the seaside resorts room inventory by about 20%, according to the Atlantic City Convention & Visitors Authority. More are on the way.
Boosters say the additional rooms and new offerings, including spas, restaurants and designer stores, are part of the citys bid to remake itself as a destination that appeals to visitors looking to do more than gamble. Restaurateur Stephen Starrs Buddakan and stores like Tiffany & Co. are already located in Taubman Centers Inc.s Pier Shops at Caesars, a retail complex opened in 2006.
The pressure is on. With the national economy slowing and Pennsylvania casinos cutting into Atlantic Citys customer base, casino revenue from slot machines and table games fell 5.7% last year, marking the citys first annual decline, according to the New Jersey Casino Control Commission. Casino revenue through May of this year was down 5% from the year-earlier period.
The drop has hurt this one-county region in southern New Jersey. The Atlantic City region saw average job levels for 2007 fall 2.6% from 2006, according to the U.S. Bureau of Labor Statistics.
The bearish outlook isnt worrying Richard Fields, chairman of New York-based Coastal Marina. Mr. Fields says he believes his marina property will attract the higher-income customer who is showing up more in Atlantic City. By buying and renovating an existing casino, he also expects to deliver his property at a discount to the multibillion-dollar price tags of brand-new casinos.
Still, the credit crunch could potentially sideline some of the projects slated to transform the aging gambling town. Las Vegas-based Pinnacle Entertainment Inc.s planned Atlantic City casino, valued at more than $1.5 billion, will open no earlier than 2012, and the project could be indefinitely delayed or canceled if the macroeconomic conditions dont improve, says Pauline Yoshihashi, a Pinnacle spokeswoman.
Meanwhile, the Revel casino project still needs to find financing for the full bill if it is to open its doors in 2010 as planned. Kevin DeSanctis, Revel Entertainments chief executive, says the project couldnt be completed if more financing doesnt come through, but he expects the credit markets will loosen up around the first quarter of next year and that the project will be able to obtain the money it still needs, an amount he declined to specify.
2008-07-21
