Christie's Atlantic City plan would stop flow of money to rest of New Jersey

Projects meant to bolster struggling Newark, New Jersey's largest city, have received millions of dollars from an unlikely source: the casinos 100 miles south.

Atlantic City gambling halls in recent years have chipped in $1.5 million to expand housing at Seton Hall Law School, $2.8 million to open a preschool in the North Ward, and $500,000 to add space at a nonprofit environmental and ecological center.

How the money got there has its origins in a political deal struck in the 1980s - a deal that Gov. Christie not only wants to undo, but whose unraveling would require the support of Democratic Assembly Speaker Sheila Oliver. Her home turf of Newark's Essex County has received $27 million in all from the casinos.

Following the release of sweeping recommendations from a gaming report he commissioned, Christie last month called for allowing Atlantic City to keep all money from the Casino Reinvestment Development Authority, an agency created in 1984 to invest in economic development statewide using a 1.25 percent tax on gaming revenues.

The influential Sen. Bill Gormley (R., Atlantic) originally wanted Atlantic City to retain all revenues, but he knew that would be politically impossible. The only way to get the votes for the CRDA "was to divvy up [the funds] around the state," he recalled.

And over the last 26 years the CRDA did that, channeling $189 million to North Jersey counties, $164 million to South Jersey outside of Atlantic City, and $1.5 billion to the resort itself.

In Camden, the CRDA spent $8 million for the Victor apartments, $2.5 million for the aquarium expansion, and $6.2 million for the Boys and Girls Club. Casino money funded a regional fire-training center in Blackwood, senior housing in Maple Shade, and a controversial development project that displaced shopkeepers in the Pennsauken Mart.

The 1984 legislation, enacted six years after the first casino opened to ensure that the state shared in the profits of gaming, projected something far different from what Christie is endorsing.

It required all CRDA revenues in the beginning to be invested back into Atlantic City. Over time, however, the statute channeled less money to the resort and more to other parts of the state.

Based on a staggered funding schedule that depended on when a casino opened, casinos eventually would fund nothing in the resort and split their CRDA revenues evenly between North and South Jersey. For example, Resorts, the first casino that opened, would end its funding to Atlantic City by 2020. "Times have changed, and now we're trying to save the industry, trying to save the 38,000 jobs just in the industry alone, and it's time to consider focusing the money in Atlantic City because they need the stimulus now," said Gormley, who retired in 2007.

The CRDA's future is expected to come up for discussion at a gaming summit that starts Friday in Atlantic City and continues at later dates in Trenton and at the Meadowlands. Democratic lawmakers who convened the summit say they will address recommendations in the report, released July 21 by a Christie advisory panel as part of a broad examination of the state's troubled gaming and entertainment industries.

Asked her position on keeping CRDA money in the resort, Oliver said in a statement, "We are cognizant of the issues and recommendations put forth by the governor, and we are certain that [the gaming summit] will document and reveal all points of view."

Assemblyman John Burzichelli (D., Gloucester), who is cochairman of the summit, said those who created the CRDA "probably believed Atlantic City would be stronger as time passed, and so some of the money that would be needed in the city would be able to go elsewhere, because Atlantic City would have seen greater prosperity."

In his district, casino money has funded $2 million for senior housing in West Deptford and Clayton, and $1.8 million for a rail line in Salem County.

But Burzichelli described a bigger picture, saying, "If Atlantic City is not healthy and prosperous, there's nothing to talk about."

"Atlantic City needs all the help it can get for it to be successful," echoed CRDA Chairman James Kehoe of Camden County, which has received about $60 million in CRDA money.

Many residents outside of Atlantic City aren't aware of the CRDA, but its funding can have statewide reach.

In 2009, the CRDA approved $7 million in spending for a project to increase grocery stores in underserved urban areas, such as Camden, Trenton, and Jersey City. It also lent the Department of Community Affairs $4 million to provide for construction and rehabilitation of affordable housing in urban areas after the state's Urban Housing Assistance Fund came up short on revenues.

Christie's criticisms of Atlantic City are focused on some of the problems that the CRDA has spent years trying to rectify, such as expanding the resort's nongaming attractions and giving the faded Boardwalk a face-lift.

The CRDA approved $45 million since 2000 to spur development of the Walk retail outlet stores, which revitalized the entrance to the resort from the Atlantic City Expressway. It also helped expand nongaming attractions at the casinos by approving money in 2001 for the Quarter at Tropicana and in 2005 for the House of Blues at Showboat, though the agency has faced some criticism for investing casino money back into the casinos.

The authority has spent an additional $35 million sprucing up facades along the Boardwalk. CRDA Executive Director Tom Carver said the agency would like to bring in a "higher level" of tenants but doesn't have the power.

"The concept always was that Atlantic City would be doing better," said Carver, who at the time of the authority's creation headed the resort's casino lobbying association.

Carver said there had been no common vision for what Atlantic City should be. The state had one, the industry had another, and the city had a third.

But with more money, he noted, plans for Atlantic City - such as revitalizing areas by the Convention Center and the Walk - could be adopted more rapidly.

Officials acknowledge that many details have yet to be worked out, and some compromise may be needed. For example, keeping all casino revenues in Atlantic City could preclude some bigger-picture projects from receiving CRDA funding.

The authority funded a transportation plan to address needs across Atlantic County and is providing funding for the NextGen Research and Technology Park in Egg Harbor Township, which is expected to diversify the economy by creating high-tech jobs for engineers and other professionals.

The CRDA also created a $20 million fund to be used for affordable housing with easy access to public transit around South Jersey for casino workers and others with comparable wages.

Sen. Jim Whelan (D., Atlantic), a former Atlantic City mayor and cochairman of the gaming summit, pointed to the Walk, the revitalization of the Northeast Inlet, and spending on the Boys and Girls Club as CRDA success stories, but said, "It is not as far along as you would have hoped."

He added: "As the governor suggested, it's time to revisit this. It's going to be difficult politically, obviously, but we'll see."