New Jersey Senate President Stephen Sweeney said Wednesday
that he envisioned creating a nonprofit board composed of top business leaders
that would reinvest gaming revenue from potential casinos in North Jersey into
Atlantic City.
Faced with the prospect of four Atlantic City casinos
closing this year, Sweeney recently signaled an openness to casino expansion in
North Jersey, possibly as soon as November 2015. Sweeney's idea is one of
several being contemplated as the Shore city grapples with declining gaming
revenue and worker layoffs.
Facing competition in Pennsylvania, New York, and elsewhere,
Atlantic City saw gaming revenue dropped from $5.2 billion in 2006 to $2.9
billion last year.
Citing "ongoing casino revenue declines, expected
near-term casino closures, and the impact of sizable casino tax appeals,"
Moody's Investors Service on Wednesday downgraded Atlantic City's debt to junk
bond status. Its outlook remains negative. The debt rating makes it more expensive
for the city to borrow money.
Expanding gaming would require the approval of voters, since
the state constitution restricts casinos to Atlantic City. Sweeney said he
would only support a proposal that would help the struggling resort.
That would likely mean part of the revenue generated by
casinos up north would go back to Atlantic City, and the board would determine
how to use it.
The proposed board would include "business people that
know how to make business happen, not government," Sweeney said during an
hour-long interview Wednesday with the Inquirer Editorial Board.
He said he was not aware of a model for such a board and
emphasized that nothing had been finalized. Possible investments include
repurposing the casino buildings or knocking them down to bring new businesses
in, he said.
"I just don't want to give money to government, because
I know what they do with it," said Sweeney, a Democrat from Gloucester
County. "They make government bigger."
He praised Atlantic City's new mayor, Republican Don
Guardian, as a strong "cheerleader" for the resort. Sweeney said he
and Gov. Christie had agreed before November's election that the state would
take over Atlantic City if Mayor Lorenzo Langford, a Democrat, had won another
term.
"We couldn't allow the city to continue going in the
direction it was going," Sweeney said.
Christie's office declined to comment.
Echoing Sweeney, Christie told reporters in Keansburg, N.J.,
this month that "any expansion of gaming to other parts of the state would
have to have, as an element to that plan, how that gaming will help the folks
in Atlantic City."
The city is likely to lose thousands of jobs by the end of
the summer. Trump Plaza issued layoff notices this month and said it would
close by mid-September.
Revel and Showboat also have threatened to close if they do
not find a buyer soon, while Atlantic Club was shuttered in January. The four
casinos have employed a total of 8,900 workers, nearly a third of the city's
workforce.
At a news briefing in front of the construction site for the
Bass Pro Shops outlet, Guardian said Wednesday that he was hopeful the casino
properties would find buyers. He said there were a "half-dozen"
companies looking at Revel. The owner of the former Atlantic Club also is
discussing a sale, he said, possibly to Richard Stockton College, which wants
to open an Atlantic City campus. Showboat also has had inquiries.
Officials are exploring whether the Casino Control
Commission has the authority to compel the companies to remain open longer than
60 days. The commission is investigating, but has indicated that is not likely.
Guardian said job training would be available for unemployed
workers, and he expected current projects in town to produce about 1,000 new
jobs in the next year.
Asked how government could address the immediate job losses,
Sweeney said: "With the shrinkage, obviously, some of the houses will do
better because there'll be less competition. They'll hire some people. The
short term is dealing with the pain we're going to experience.
"Gaming's been cannibalized," Sweeney said, but he
said he still believes the city can reinvent itself. Instead of being a
"casino town with a beach," Sweeney said, "what we really want
Atlantic City to be known as is a resort town with casinos."
It remains unclear how that might happen.
"That ship has sailed," said Jim Diffley, senior
director for U.S. regional economics at IHS, an economic consulting and
forecasting firm.
State Sen. Raymond J. Lesniak (D., Union), who has long
pushed for expanding gaming, has said casinos in North Jersey could dedicate
$100 million in revenue a year for 10 years to Atlantic City. Sweeney indicated
that wasn't enough. "Absolutely not," he said.
He declined to provide his own estimate.
"It's really simple. Is it a 50 percent tax on the
casino in North Jersey, where half of the money comes to Atlantic City, and the
other half stays there?"
In Atlantic City, officials are less sanguine about the
possibility of North Jersey gaming, but seem to think it's inevitable.
"Personally, I'd love to not have this
conversation," said State Sen. Jim Whelan, a former Atlantic City mayor.
"Can I support something that is a hypothetical? I don't know. I don't
sign blank checks."
Source: Philly.com
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