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New Jersey Takeover of Atlantic City Confirmed
I don’t have the money to subsidize failure," says governor.
Leaked information that the New Jersey state government planned to take over the casino district of struggling Atlantic City was confirmed Wednesday at a press conference held by Governor Chris Christie.
With an abundance of PR pizzazz Christie stood on the 50-yard line of the New Meadowlands Stadium and declared the state government’s long romance with horse racing dead.
"I don’t have the money to subsidize failure," he said, summarising the findings of a special commission which has concluded that the state’s long-standing financial support of horse racing has had its day. Christie later moved to the Atlantic City boardwalk to confirm that the state intends to take over the casino district and turn it into what he called "Las Vegas East."
The extensive changes proposed by the commission of enquiry are critical and need to be implemented by summer 2011, he said, adding: "Delay will lead to demise."
The changes will seek to revitalise the gambling industry, prop up city finances and create a family-friendly attraction similar to Las Vegas, and are necessary because the gambling centre has deteriorated into an unsafe, dirty and corrupt dinosaur that has failed to adapt to increased competition and new industry standards, observers say.
Christie, a Republican who advocated budget cuts while campaigning for office last year, said the overhaul was necessary to lure tourists back to New Jersey.
"We have to make a renewed, bold commitment to Atlantic City," Christie told the Reuters news agency. "We can't afford for Atlantic City to go under with no opportunity for the state to participate in making it better."
The commission's proposal also calls for the loss-making Meadowlands Racetrack in northern New Jersey near New York City to be sold or leased and the completion of the accompanying Xanadu, a much-criticised, half-finished $2 billion entertainment and retail complex.
Giving a history of Atlantic City development, Reuters reports that it became a popular seaside resort in the 19th century known for its boardwalk, hotels and amusements. But its fortunes sank by the 1970s, prompting the state to approve gambling to reinvigorate the economy, with the first casino opening in May, 1978.
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However, revenues have fallen in recent years, and in 2009 Atlantic City's 11 casinos grossed a total of $3.9 billion, the worst year in more than a decade, according to the Casino Control Commission. The casino district has been hit hard by competition from new casinos in neighboring Pennsylvania and the recession.
In Atlantic City, the goal is to create a public-private partnership that would take over the convention and visitors’ bureau and Boardwalk Hall, an entertainment venue.
Christie's plan has a way to go yet before it can be realised. It must be approved by the Democratic-controlled state legislature, where it has some support and state politicians characterise it as timely and much-needed.
"The commission's vision for revitalising Atlantic City is encouraging" Democratic Senator Jeff Van Drew told Reuters. "One thing we know is we can no longer use Band-Aid approaches in an attempt to heal a city suffering with a gaping wound."
Other Democrats wondered how the public-private partnership would operate and who would pay for the investment.
"The one question every casino executive should be asked and be expected to answer is 'How much additional capital are they prepared to invest as a result of a state takeover?," said Senator Raymond Lesniak, a Democrat who supports legalised online gambling as a way to plug state budgetry gaps. He estimated the plan would require more than $1 billion.
"A state takeover of the casino district does nothing to infuse Atlantic City with the resources needed and allows Las Vegas, New York, Pennsylvania and Delaware to continue to take these resources from New Jersey," Lesniak said.
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