It was in 1982—just six years after the legalization of gaming in New Jersey, when Atlantic City was a broken-down, burnt-out community betting its future on Americans’ insatiable appetite for gambling—that Bruce Springsteen released the song “Atlantic City”: “Well now everything dies baby that’s a fact/But maybe everything that dies someday comes back.” The Boss was prescient. Atlantic City did come back, thriving for nearly 30 years by sucking on the narcotic teat of casino gambling. But, today, in the midst of the worst recession in 70 years, with surrounding states legalizing gaming and cannibalizing Atlantic City’s economic base, the Queen of Resorts again finds herself in a fix.
And this one might be all or nothing.
And this one might be all or nothing.
On Sept. 9, attorney Damon Tyner, son of the first president of the City Council and brother of a local cop, pulled his sedan into an empty expanse of grass just off the boardwalk’s main drag. Before him lay Bader Field, Atlantic City’s original airport and, indeed, the source of the very word “air-port.” In 2008, development rights at Bader Field were put up for bid, initially valued at $1 billion. Then the recession hit. No bids came. No development materialized. Next to the empty lot sits Flyers Skate Zone, an indoor skating rink, and next to that is the defunct Bernie Robbins Stadium, a one-time minor-league baseball field that closed last year.
“Now it’s fallen into disrepair,” Tyner said, sitting in his car. “It’s just really sad.”
In the distance sat the nearly complete Revel, a $2 billion skyscraper on the boardwalk that was designed to host 20 restaurants, a 1,900-room hotel, three theaters and more.
Then that developer ran out of money. An impossibly tall crane now slumbers at the skyscraper’s side. Tyner said he hasn’t seen the crane move in four months.
James Leonard, a local attorney and the publisher of a local magazine called The Boardwalk Journal, sat in the back seat of Tyner’s car. He called Atlantic City a “prophecy unfulfilled,” an apt description for a place with so much promise, a repository for so many dreams.
Since 2007, gaming revenue in Atlantic City has fallen more than 25 percent; the city has lost 12,000 jobs; Resorts Casino was bought in foreclosure for a mere $35 million (in 2001, it cost $140 million); and the $2 billion Revel project has run out of money. Third quarter of this year, even the revenue at the city’s new flagship casino, the Borgata, was down compared to the year before. Caesars’ revenue actually dropped 43 percent.
Desperate, the city is considering a full-body makeover—looking to Atlantic City’s pre-gaming past, to a time when it was known more for its boardwalk and family atmosphere than its glassy-eyed, bused-in senior citizens giving their Social Security checks in nickels to one-armed bandits, not to mention Carl Icahn and Donald Trump. The crisis has forged an unusual alliance of business and civic leaders, state and local officials, Republicans and Democrats, all of whom agree on one thing: Atlantic City needs to reinvent itself once again, and it needs to do so now.
“I think it’s a Kennedy quote—when you’re in a foxhole, everybody’s the same color and creed—and guess what, fellas, everybody’s in the foxhole now,” former state senator and longtime civic leader William Gormley said. He chuckled devilishly. “It’s foxhole time!”
In the Sept. 19 premiere of Boardwalk Empire, the HBO drama set in Prohibition-era Atlantic City, the town’s de facto boss, Enoch Johnson, marks the arrival of Prohibition with a decadent, New Year’s Eve–style party. When the clock hits midnight, Champagne flows. Black balloons cascade from the ceiling. Women in sumptuous, glittery dresses carouse with men in tuxedos. This was Atlantic City’s first major reinvention, into the nation’s original Sin City.
Incorporated in 1854, Atlantic City began life as a spa town, the kind of place doctors would send patients for the lugubrious salt air. It developed into a popular resort, known for its beaches and its boardwalk (originally designed to diminish the amount of sand patrons trailed into the hotel lobby).
“It was the first city in the country built from scratch and devoted entirely to the production and public consumption of entertainment,” writes historian Bryant Simon in Boardwalk Dreams: Atlantic City and the Fate of Urban America (Oxford University Press, 2004).
By the time 1970 rolled around, Atlantic City was in trouble. Middle-class white families were fleeing the city for the suburbs, leaving abandoned, unsellable homes in their wake. Tourists no longer flocked to the seashore. Stores on the boardwalk closed. In 1976, Brendan Byrne, then the governor of New Jersey, legalized gambling. In 1978, Atlantic City’s first casino, called Resorts, opened on the boardwalk. This was Atlantic City’s second reinvention.
The arrival of gambling resurrected the city’s economic base, providing thousands of jobs; it also pumped millions of tax dollars (now $1 billion a year) into state coffers.
Yet legalized gaming had its downsides. Main Street businesses were sucked into the new citadels rising on the boardwalk: immense, self-contained gaming universes, their facilities designed without windows or clocks so as to upend the diurnal cycle; and with restaurants, bars and hotels, so that visitors could eat, drink, gamble and sleep without ever having to leave the safety of the casino walls.
From the standpoint of Atlantic City residents, this was not the wisest of decisions. Its downtown was decimated. “When we voted for casino gaming, we had a thriving central business district,” recalled Mayor Lorenzo Langford, a lifelong Atlantic City resident. But the casino legislation was written in such a way as to destroy just that. In order to get a casino license, developers had to attach a hotel and create “public space” like dining and retail.
“So right away, unlike Las Vegas, where you might pull in off the street and go into a saloon and there’s a slot machine right in the saloon, forget about it—if you ain’t got a hotel attached to your casino with at least 500 rooms, you get no license,” the mayor said. “And so what happened was, all of the finer shops that were on the avenue decided to leave for greener pastures. They became located inside of the casinos.”
As Atlantic City developed over the past 30 years into a city of haves (the casino bosses) and have-nots (everyone else), competition began to emerge on Indian reservations. In 1988, Congress passed the Indian Gaming Regulatory Act, which allowed Indian reservations to host gambling with state approval. In 1992, the Mashantucket Pequots opened Foxwoods on their reservation five hours to the northeast of Atlantic City, in Connecticut. The casino was nicely situated between New York City and Boston, and quickly became the most profitable in the nation, earning an astounding $1 million in revenue daily.
As early as 1993, analysts began warning of dire days to come for Atlantic City. In a September appearance on CNN’s Moneyline, gaming analyst John Rohs told then-host Lou Dobbs: “Foxwoods is slowing the rate of growth in Atlantic City. It’s doing it on the table games; and it’s doing it on the slots; and it’s doing it because of the nature of the market. Atlantic City is a day-tripper market. If you give a day-tripper a more proximate alternative, they will take it at least some of the time.”
Moneyline’s business correspondent Jan Hopkins chimed in: “There are now 88 casinos in 18 states run by Native American tribes. All started in the last three years. Revenues have tripled to more than a billion dollars. Riverboat gaming is another threat—the fastest-growing segment of the gaming industry, up 400 percent last year. Potential sites include neighboring Pennsylvania. Unlike Atlantic City, Las Vegas is keeping ahead of the changing market by expanding gaming to include family entertainment. Vegas is going after the leisure traveler. The day-tripper is still Atlantic City’s bread and butter. Analysts warn it needs to expand the menu.”
In 1995 and 1996, slots at Dover Downs and Delaware Park and Harrington Raceway all opened, about two hours west in Delaware. In 1996, Mohegan Sun opened near Foxwoods in Connecticut.
The increasing competition did not go entirely unheeded. In 1997, Atlantic City got a convention center. Talk began to turn toward widening Atlantic City’s demographic appeal, to lure what the current mayor now describes as “yuppies and buppies.” In 2001, a $330 million tunnel opened that linked the Atlantic City Expressway with the city’s marina area, site of Harrah’s, Trump Marina and the $1 billion Borgata hotel-casino, completed in 2003. In 2002, Harrah’s completed a $200 million expansion, building 452 new hotel rooms that it claimed were on a par with high-roller Las Vegas luxury.
Some of the investment even improved downtown Atlantic City. In 2004, developer David Cordish replaced the abandoned housing that used to greet visitors with an outdoor outlet mall called the Walk. So successful was the Woodbury Commons–style mall that in 2007, Cordish completed an expansion, and today is embarking on a third phase. In 2008, hotelier Curtis Bashaw finished the $110 million Chelsea, which transformed an old Holiday Inn and Howard Johnson into a boutique hotel, with two Stephen Starr restaurants and bars influenced by the stylish crew from Beatrice Inn.
In early 2009, an express train called ACES was launched, with direct weekend service between Atlantic City and Penn Station, with only one stop, in Newark. Between 2002 and today, 45 new restaurants were built, according to Jeffrey Vasser, the president of the Atlantic City Convention & Visitors Authority and the former chief financial officer of Cipriani.
Yet if the recently burst economic bubble brought an Atlantic City building boom, it also ushered in yet more competition outside of the city. Pennsylvania legalized slot machines in 2004. The year 2006 saw the opening of Mohegan Sun at Pocono Downs, the Philadelphia Park Casino and Racetrack, and Empire Casino at Yonkers Raceway in New York. The following year, two more Keystone State casinos opened: Harrah’s Casino and Racetrack in Chester and Mount Airy Casino Resort. In 2008, the Hollywood Casino at Penn National Race Course joined the gold rush. In 2009, the Sands Casino Resort opened in Bethlehem. In January, Pennsylvania legalized table games. Now, Massachusetts is considering legalizing gaming, and many predict New York will be next.
Mayor Langford leaned closer to the table in his conference room on Sept. 9 and etched out an ambitious plan for the endangered casino town. The former pit boss cupped his hands like he was about to lead an invisible game of three-card monte, but instead began laying a plan for the city on the wooden table.
“I have a goal of developing a comprehensive entertainment-slash-recreation complex that has among its components movie theaters, roller skating rinks, a bowling alley, a family fun action center like your Dave & Busters, a museum—it could be the New Jersey hall of fame or museum,” said Langford, dressed like only the mayor of Atlantic City could be: bright yellow tie on yellow shirt with black-and-white checkered collar and cuffs, oversize gold-and-crystal links, a mustache and a soul patch. “If you have all of these kinds of things in one area, that becomes an attraction in and of itself, and would draw people to Atlantic City who would come for that reason and gamble while they’re here.”
Casinos as merely the sideshow, rather than the main attraction in Atlantic City? That would constitute a reinvention the likes of which the city hasn’t seen in 30 years. And one upon which the city’s future is dependent.
“Clearly,” said Jim Whelan, a former mayor and current state senator, “this is the biggest challenge we’ve faced in the casino era.”
With the collapse of the economy and the drying up of tax revenue, experts predict more states will join the throng of municipalities looking to benefit from America’s heavy appetite for gaming.
“In Massachusetts, it’s heated up a lot more; in New York, it’s certainly heated up,” said Richard McGowan, a gaming expert and professor at Boston College. “The casino thing will look like the lottery in 10 years time. Almost every state will have something.
“And then the next big fight will be Internet gambling,” he continued. “What do you do about that? Then the ultimate fight will be sports gambling.”
Enter New Jersey Gov. Chris Christie.
On July 21, a state commission created by executive order released a study titled “An Economic Recovery Plan for the State of New Jersey,” one of whose central facets was the resurrection of Atlantic City. The report gave a blunt assessment, while also noting that its casino industry accounts for nearly $1 billion in tax revenues annually, some of which funds programs for senior citizens and the disabled throughout New Jersey. The report concluded that “Atlantic City has no choice but to try to reestablish itself as a true ‘destination resort.’”
To that end, the commission advised the creation of a special casino and tourism zone to be governed by a public-private authority whose members would include city and state representatives, as well as representatives from the casino industry. The authority would handle crime and cleanliness issues, woo investors to Atlantic City and diversify the economic base.
Langford, to the surprise of some observers, seems relatively unfazed by the recommendation that a public-private authority usurp some of his mayoral powers. But there are other obstacles—notably legislators from northern New Jersey, who oppose a corresponding commission’s recommendations for ending the gaming industry’s subsidies of horse racing at the Meadowlands.
Even if the Legislature rejects the plans of Christie’s commission—and some analysts say the chances of that are likely—there are other ways to go about implementing its spirit, if not its letter. Langford has established an independent strategic committee, comprised of local stakeholders, that espouses a similar prescription: diversification and greater cooperation.
“Here’s what I did: I said, ‘We all may have gotten to where we are right now having arrived in different boats, but we’re all in the same boat now,’” the mayor said. “And unless and until we drop our oars in the water at the same time and row simultaneously, that boat’s going to sink. But if we get on the same page, can’t nothing stop us.”
Whelan likes to say that Atlantic City “is a little bit like Dracula. You can’t kill us. We keep coming back.”
Maybe so. Surely, the Christie proposal, the Langford commission and the unprecedented collaboration between casino owners and local officials—not to mention the imminence of Boardwalk Empire, which will likely spawn all manner of Nucky Johnson–inspired tourism—can only help.
This is the strip of Jersey, after all, that inspired Springsteen to write, in that same melancholic 1982 song, with its hard-luck narrator about to take one last shot at success: “Put your makeup on fix your hair up pretty/And meet me tonight in Atlantic City.”