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Hard Rock Casino Coming to Atlantic City?

Will the Hard Rock Casino build in Atlantic City, NJ?

The New Jersey State Senate on Thursday approved a bill to allow two new casinos to be licensed in Atlantic City with fewer hotel rooms than current law requires. The bill would allow two casinos with just 200 rooms, fewer than the currently required 500 rooms, and with less casino floor space than today’s gaming halls. Both new casinos would have to be built close to the Boardwalk, and at least one would be expected to expand into a full-sized 500-room casino with increased floor-space within five years.

“We’ve seen larger projects die on the vine in Atlantic City because investment capital dried up, and no one is willing to take a chance during a difficult economic period,” Whelan said following the vote. “Not only does this bill lower the investment threshold to get new casinos in to redevelop blighted areas in Atlantic City, but it creates a safety net so that development capital is available in good times and bad, and a guarantee that construction actually takes place.”

Lawmakers had considered the proposal – which has earned the nickname “boutique casinos” – in the spring, when Republicans were lukewarm about the concept. Casino executives represented by the Casino Association of New Jersey told Whelan during a Senate wagering committee hearing that they did not support the idea. Joe Corbo, then-head of the association, cited concerns about overcrowding of the market and potential new casinos failing to meet a high standard for the resort.

Hard Rock Casino Atlantic City – Let the Games Begin!

“We need to get people back to work in Atlantic County, and bring in capital investment,” Assemblyman Vincent Polistina said Thursday night.

While Whelan has said the bill lowers the entry fee for doing business in the resort, new licensees will have to pay significant money to the state upfront and throughout the life of their projects. The two licensed properties would have to pay $2 million upon commitment to a license. The money would be shared between the city government and the state to complete infrastructure improvements around the casino sites.

As an incentive to expand, the two developers would also pay 5 percent of their gross revenue into a fund that could then be used for expansion and structural improvements. But if they decide not to expand in five years, they would pay an additional 5 percent of gross revenue to the same fund, and that money could be used by other casino businesses or by Atlantic City government on capital improvements within the Boardwalk district.

That provision, which was added in the last two weeks, leaves open the possibility that the fund could assist in operation of a proposed new state-run tourism district surrounding Atlantic City’s Boardwalk, Inlet and Marina areas. Gov. Chris Christie proposed the district in July. This was the first piece of Atlantic City-related legislation to pass a full vote since the governor’s announcement.

The bill is also a catalyst for a proposed Hard Rock casino hotel which parent company Hard Rock International would build in partnership with New York-based investment group Och-Ziff Real Estate. Hard Rock Chief Executive Officer Jim Allen said work on the estimated $400 million to $450 million project would begin almost immediately after the boutique casino bill receives final approval by the Assembly and Christie.

“Certainly, if this bill passes, we’ll continue to travel down this path,” Allen said in an interview with The Press of Atlantic City. “We are still very enthused about a Hard Rock in Atlantic City.” Design work on the Hard Rock casino would take about six to eight months, with construction stretching out over another 18 to 22 months, Allen said. Although Hard Rock is far from finalizing its designs, preliminary plans call for 200 to 300 hotel rooms to start, eventually building up to 500, he said. “We’re committed to going ahead and meeting the 500-room minimum,” he said.

Hard Rock Atlantic City remains one of the few developers serious about building a new casino in a gaming market mired in a four-year revenue slump and hounded by competitors in surrounding states. Atlantic City has been further plagued by the sluggish economy, but Allen said there are signs of a recovery on the horizon. He also believes Atlantic City has absorbed the worst from the rival Pennsylvania casinos.

Hard Rock is encouraged, Allen said, by Southwest Airlines’ pending takeover of AirTran, a carrier that serves Atlantic City International Airport from Atlanta. The merger potentially means expanded AirTran service to Atlantic City or Southwest could bring in its own brand of flights to the city, Allen said.

Atlantic City Monopoly – Travel Guide

The Atlantic City Conventions and Visitors Authority came up with an unusual substitute for a guidebook to Atlantic City, New Jersey. They found their way around town using a Monopoly board.   The guidebook publisher’s U.S. travel editor Robert Reid made an amusing video of his effort to use Monopoly as his guide, walking around town carrying a game board and the property cards bearing familiar street names.

Standing on St. James Place with the corresponding card, he said, “A lot of people don’t realize that the places — Oriental Avenue, Ventnor Avenue, St. Charles Place, Park Place and this, St. James Place, are real and they can be visited here in Atlantic City.”  He then walked into a small hotel, the Inn of the Irish Pub, and told the man at the desk that according to his Monopoly card, he could buy the hotel for $100 plus four houses.

“We would never sell this hotel,” responded local Atlantic City Resident Frank Pileggi, but he later accepted $30 in Monopoly money to pay for Reid’s night at the inn.  In addition to visiting various streets, Reid’s tour included a stop at the city water tower with the “Water Works” utility card in hand, and a shot of an Atlantic City police car to correspond to the “Go to Jail” card.

State of New Jersey to Take Over Atlantic City, NJ

The State of New Jersey is getting ever more involved with the day-to-day operation of the nation’s second-largest gambling market.  Atlantic City agreed Tuesday to let state officials take control of the city’s troubled finances to help it get back on its feet and avoid crushing tax increases that otherwise would have had to be passed on to residents and businesses.

It’s Gov. Chris Christie’s second major move to assume greater control in Atlantic City, whose 11 casinos have been reeling from a nearly four-year revenue plunge set off by competition in neighboring states and the continuing poor economy. Earlier this year, Christie announced plans to set up a special casino and tourism district in Atlantic City overseen by the state.  “Atlantic City is at a crossroads where its revitalization and future as a resort destination are now taking shape,” the Republican governor said of the overwhelmingly Democratic city. “This is not the time, nor is it the right message to be sending, for Atlantic City to be imposing burdensome tax increases on its citizens and business community.

“We want to help Atlantic City through this difficult period, but we also want the city to improve and maximize its management and fiscal policies so it is best positioned for revitalization and long-term prosperity,” Christie said.  Atlantic City elected officials sought to portray the move as help from the state rather than an outright takeover, even though the state retains ultimate control over the city’s finances.

“We welcome this partnership with state government in what we are trying to accomplish for our city,” Mayor Lorenzo Langford said. “The governor can help us to convey to the rest of New Jersey all the progress we are making to improve the management of our city to pave the way for a brighter future.”  The arrangement will allow the city to gradually close its $9.5 million budget deficit over five years, sparing residents and businesses a significantly larger property tax increase this year. The state’s Local Finance Board voted Tuesday to approve bonding to pay for Atlantic City’s tax appeals.  Under the agreement, city officials reduced a previous request to exceed the state property tax cap by nearly $10 million to just over $2 million instead.

Had the higher waiver been approved, Atlantic City taxpayers would have been hit with an average increase of $253. The lower waiver means that increase will now be $157.  Other benefits of state supervision include allowing the city to defer some expenses. The state of New Jersey may also provide staff and resources to help the city with its finances.  The municipal budget up for a vote Wednesday night is about $216 million.  Atlantic City government needs help, the mayor has no clue.

MGM to Sell It’s Share of Borgata Atlantic City

Atlantic City, New Jersey casino regulators on Thursday approved the $73 million sale of land underneath the Borgata Hotel Casino & Spa as part of MGM Resorts International’s exit from the nation’s second-largest gambling market.

The state of New Jersey Casino Control Commission approved the sale of 11.3 acres to Vornado Realty Trust and Geyser Holdings, through their newly formed company Atlantic City, New Jersey GL LLC. It’s part of the casino company’s forced exit from Atlantic City over its ties to the daughter of a reputed Chinese mob boss.

MGM Resorts is selling its half-interest in the Borgata itself following an ultimatum from New Jersey casino regulators that it sell its 50 percent stake in Atlantic City’s top casino, or cut ties with Pansy Ho, its partner in a casino in the Chinese enclave of Macau. Ho’s father, Stanley, has long been accused of ties to organized crime, which he denies. MGM Resorts chose to keep its relationship with Ho and walk away from the Borgata. Linda Kassekert, chairwoman of the casino commission, said the sale needed to be approved to enable MGM Resorts to leave Atlantic City under the agreement it reached with the commission in March.

The company revealed this week that it had received an offer of $250 million for its interest in the hotel. MGM Resorts would not identify the potential buyer. Boyd Gaming, MGM Resorts’ partner in the Borgata, has the right of first refusal on any sale of MGM Resorts’ half of the casino. “MGM has formally presented us with the offer; we have just begun the process of considering it,” Boyd spokesman David Strow said Thursday.

Boyd has 30 days to decide whether to exercise its right to buy MGM Resorts’ half of the Borgata Atlantic City Casino.

Atlantic City Casinos & Hotels Send Layoff Notices

Atlantic City hotels and casinos are sending out notices to its workers warning them they could be laid off soon as the struggling casino prepares to change ownership.  John Pasqualoni, Resorts casino’s chief operating officer, told employees in a memo Thursday that they will receive notices in the mail Friday as required under the Worker Adjustment and Notification Act, otherwise known as WARN.  The notices were first reported by The Press of Atlantic City.

Resorts Casino — the first in the nation to open outside Nevada — is being bought by veteran casino executive Dennis Gomes and developer Morris Bailey for $35 million. That’s the lowest price ever paid for a casino in New Jersey’s 32-year history of legalized gambling.

A casino spokesman would not comment on the notices or say how many of the casino’s 2,124 workers could lose their jobs.  The notice warned layoffs would occur Dec. 1 — the  same day Gomes and Bailey are expected to receive approval from the state Atlantic City Casino Control Commission to take over Resorts.  “We are doing everything in our power to ensure the sustainability of the property and facilitate the smooth transition of the purchase of Resorts Atlantic City,” Pasqualoni wrote in the memo to employees. “However, there are some considerations that are outside of our control and for that reason, not only is this notice a legal requirement, but I believe it is the right thing to do.”  Neither Gomes nor Peter Hoelzle, president of the RAC Atlantic City Holdings, immediately returned calls seeking comment Friday.

Atlantic City Hotels Layoff Casino Workers – News!

After Resorts Casino defaulted on its mortgage and turned itself over to its lenders in December 2009, the two sides hammered out a deal that let the lenders own the casino in return for canceling nearly $381 million in debt. The lenders formed RAC Atlantic City Hotels & Casino Holldings, which was given a one-year casino license.  RAC said then that it wanted to find a buyer as quickly as possible.   “We have no intention of operating the casino or the hotel well into the future,” Hoelzle told the state casino commission last fall.

Gomes and Bailey struck the deal to buy Resorts Casino Atlantic City from RAC in August.  Resorts opened in 1978 but in recent years has been dwarfed by newer, bigger casinos around it. It also was hurt when slots parlors opened in recent years in neighboring Pennsylvania began siphoning off its most loyal customers, mainly day-tripping senior citizens who would ride the bus to play slots for a few hours.  By fall of 2008, the nationwide recession had pushed Resorts to the brink, and the casino made no payments on its $360 million mortgage after October 2008.  Its lenders, including Wells Fargo on behalf of Credit Suisse First Boston Mortgage Securities Corp., could have foreclosed on it but chose to work out the deal in which the casino ceded ownership to them.

Hopefully, by trimming the fat, Atlantic City hotels and casinos will be able to cut costs and stay afloat into the future.

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