Atlantic City Faces Downward Spiral With Revel’s Demise

[Purveyor]

By Terrence Dopp Aug 12, 2014 8:00 PM ET

The shuttering next month of Revel, the $2.6 billion hotel and casino that was meant to usher in a new era of opulence in Atlantic City when it opened in 2012, is set to quicken the seaside community’s downward spiral.

Five years after the longest recession since the 1930s, hotel rooms sit vacant and revenue keeps falling in what was once the second-largest U.S. casino market. New Jersey Governor Chris Christie’s turnaround plan for the municipality, begun in 2011 and hinged on Revel’s success, hasn’t delivered, prompting Moody’s Investors Service to cut the city’s $245 million of general-obligation debt to junk last month.

Moody’s pins the city’s struggle mostly on its dependence on one industry. About 70 percent of taxes come from casinos, whose revenue has slid for seven straight years as competition from neighboring states intensifies. While Las Vegas has rebounded, drawing tourists with conventions and restaurants, Atlantic City remains largely a place for gambling day-trippers.

The demise of Revel is “more confirmation that they’re headed in the wrong direction,” said Matt Dalton, chief executive officer of White Plains, New York-based Belle Haven Investments, which manages about $2 billion of municipal bonds. “They don’t have the money to spend on what it’s really going to take to rejuvenate that area and bring people in.”

more...

http://www.bloomberg.com/news/2014-08-12/atlantic-city-faces-downward-spiral-with-revel-s-demise.html

[djean111]

1. I still remember Atlantic City from before the casinos took over.

Walking on the boardwalk, riding horses on the beach out of season, Taylor's Pork Roll and salt water taffy.
I lived in Philly, and places like Atlantic City and Wildwood and Ocean City were all referred to as "down the shore", and the biggest decision was whether to use White Horse Pike or Black Horse Pike. Stopping at roadside stands on the way home to buy paper bags filled with beefsteak tomatoes, fruit, whatever else looked good.
Never cared for the casinos.
Wonder how rising seas will affect New Jersey.
People keep saying the recession is over, but I think it is just now affecting business that managed to hang on, but people are now much more prudent with their money - knowing things could change again at any time.
I don't imagine the TPP and other agreements will have a salutary effect on the average middle class citizen.

[Purveyor]

2. I've only been to the casinos once back around '96 and couldn't get over

how 2 blocks removed from the casino district, it was damn near a ghetto.

Took the fun right out of the trip. He I was getting ready to drop a $1k or so when I saw people living in those conditions.

That is why I never went back. The ride down there was nice though.

[djean111]

3. I was born in Philly and lived there until about 1967.

The Atlantic City I remembered, from trips when a child with my family, and then trips with friends from work, was full of rental housing for vacationers, balconies festooned with beach towels and bathing suits, all kinds of restaurants. Smelled like the ocean and barbequed hot dogs and hamburgers and, of course, Taylor's Pork Roll.
Tons of hotels and motels, with neon signs.

I was there about 10 years ago, to go to a concert in whatever the guy who owns the Bellagio's in Vegas place was called. The only memory of that is the excellent concert, and the Dale Chihuly glass in the lobby. Everything else seemed sort of grimy or tacky or tired and not meant to be seen in the daylight. Not the Atlantic City I loved when I was young. No reason to go back.

[closeupready]

4. The beach there is world class, IMO. The gaming less so.

At least the gaming is now mediocre in comparison with options elsewhere. There used to be a really big and fun poker scene, but of course as poker became passe, that left AC with one less reason to visit.

They now have legal internet gaming in NJ, so it would be interesting to see how i-gaming legalization could be responsibly exploited as a competitive tool (vis-a-vis Nevada or Pennsylvania) in terms of growing the customer base by expanding reach into existing markets, both domestically and internationally (the UK, Germany, Latin America, etc.).

[Callmecrazy]

5. My family moved to A.C. in 1980...

My dad had a job as a pit boss at the Tropicana and in '85 I got a job as a waiter there.
I hated it. The corruption in the local government is what killed the City. They didn't direct enough of the tax dollars into the infrastructure. Streets were full of potholes and traffic was clogged by all the tour buses. The Boardwalk was full of hustlers and pickpockets. I preferred the beaches in Ocean City and Wildwood to A.C. I left there in 1990 and moved back to Las Vegas. Never felt anything but relief for leaving there and have never gone back. What a toilet.

[monmouth3]

6. I performed on the Steel Pier in the late '40s, early '50s and the town was so wonderful. Those

wonderful smells and the safety for a 13 year old to travel back and forth on the bus from Absecon. I even had a long conversation with Al Pacino (he was 13 at the time too) and had come down from NY for a reading and the experience. Those were the days my friend, now, fugeddaboutit...

[Lurks Often]

7. The economy and the Connecticut casinos

have really hurt Atlantic City. I remember seeing the busses from NYC making their Sunday run back south from the Connecticut casinos on I-95.

I never went to Atlantic City, but I've been to both Mohegan Sun and Foxwoods and both are more then just gambling, both offer lots of shopping, shows with major entertainers, bars, lots of really good restaurants. Even the food court at Mohegan gave you pretty good food at a reasonable cost.

[closeupready]

8. Also, Resorts World Casino in Queens @ the racetrack

is now, if I recall correctly, the single most profitable casino in the United States! And it opened only about three years ago.

What that means is that all those gaming dollars are being cleaned up by the NY State Lottery and Genting (the casino provider), rather than ending up at Trump Plaza and Revel and Tropicana in AC.

>>From June 2012 to June 2013, Aqueduct matched a quarter of Atlantic City's total gaming revenue from its dozen casinos: $729.2 million compared with A.C.'s $2.9 billion. It has taken an estimated 10 percent to 15 percent hit on the Shore's casino revenue.<<

http://articles.philly.com/2013-07-22/business/40710011_1_aqueduct-casino-aqueduct-racetrack-casino-revenue

[Atman]

11. The two Connecticut casinos are among the biggest in the world.

Foxwoods and Mohegan Sun have to be seen to be believed. They're small cities unto themselves. My wife and I like to go to Mohegan Sun just for the restaurants, not even to gamble. It's only about 30 minutes from our home. But if any casino ever tries to come to your area by saying they're good for jobs and the economy, they're full of crap. Once you enter one of these enclosed cities, you don't leave until you've spent your wad. No one leaves to have dinner at a nearby diner...you stay in the all-encompassing maze of restaurants, bars, casinos and entertainment (Mohegan Sun as a full-scale arena, plus a smaller club-style showcase). I can see why people would prefer to drive up to these places than to deal with Atlantic City. The question is, what do they do with those hotel towers and giant buildings? I hear four other casinos closed recently. Sounds like AC is dead.

[KurtNYC]

9. "everything dies baby that's a fact, but maybe..."

Gambling alone isn't something a city can prosper with. It relies on a steady stream of fresh addicts with some wealth to extract. These days there are many places to gamble and not much wealth left to extract.

[edhopper]

10. Another Chiristie fiasco

$245 million in loans for this, but cancel the much needed train tunnel which would have brought jobs and income to the State.

Has he done anything right or not corrupt?