Stockton relocates its plans for an Atlantic City campus

Stockton University's dream of an island campus in Atlantic City will have new life on the other side of town.

Although Stockton has not completed its $23 million sale of the former Showboat Casino Hotel, where its previous plan for an Atlantic City campus unraveled, new plans are underway to build the Galloway college a campus at the southern end of Atlantic City.

Christopher Paladino, head of the newly formed Atlantic City Development Corp. (ACDevCo), said the independent, not-for-profit organization was going ahead with plans to build an Atlantic City campus for Stockton, to open in the fall of 2018.

The corporation, which is applying for 501(c)(3) nonprofit status, will partner with Stockton, South Jersey Industries, and others to fund the $200 million project, he said.

The campus would be along various blocks bisected by Albany Avenue in the Chelsea neighborhood, close to Ventnor, Paladino said.

The site contains several empty beach blocks and would include a 500-student dormitory with ocean views, academic buildings on the former site of Atlantic City High School, new retail, and a repurposed city park turned into a quad, similar to New York University's use of Washington Square Park.

A parking garage topped by new offices for South Jersey Industries, a gas utility and energy services company that is kicking in $44 million, would complete the project. Stockton would contribute $18 million, plus $17 million from the Casino Reinvestment Development Authority. The campus would serve 1,000 students at first.

Paladino was in Atlantic City to speak at a forum on public-private partnerships as part of the gathering of the New Jersey League of Municipalities.

ACDevCo acquired about 9½ acres for about $10 million in June from Goldman Sachs & Co., which had been involved in a failed attempt to build a Hard Rock Casino on the site.

Although Stockton and its former president, Herman Saatkamp, became mired in the ill-fated attempt to quickly transform the former into an island campus, the Albany Avenue build-from-scratch idea has long been considered the logical, though longer-term, route.

"It's always been the right concept," Paladino said of the Stockton Atlantic City campus in Chelsea. "This is the right implementation."

Stockton president Harvey Kesselman issued a statement saying the university was "continuing to work very closely with ACDevCo and Atlantic City to expand our presence there."

"We believe this to be in the best interests of our students in creating educational options and opportunities," the statement said. "Right now, we are still lining up financial partners to make this a reality and hope to finalize this shortly."

The project must still be approved by Stockton's board of trustees. The school's sale of the Showboat sale to developer Bart Blatstein is expected to settle in January.

The idea of a public-private development entity for Atlantic City was first proposed in a 2010 report by Jon Hanson, Gov. Christie's chief adviser on the beleaguered resort, then again in an updated report in 2014. Paladino is president of New Brunswick Development Corp., which partnered with Rutgers University to develop buildings and dormitories around the main campus.

At the forum Thursday, State Senate President Stephen Sweeney advocated extending an expired law that allowed state colleges, including the College of New Jersey, which built a $110 million College Town, to partner with private companies to develop land they own. The extension was conditionally vetoed by Christie. The Stockton plan does not rely on that law, as it is on land owned by ACDevCo.

To fund the campus, ACDevCo would take out $83 million in loans secured by the projected 30-year revenue from student rents, Paladino said.

Funding will also include an equity contribution from ACDevCo and $40 million in tax credits from the state's Economic Redevelopment and Growth Program (NJ ERG), run by the Economic Development Authority, Paladino said, though he said funding breakouts were still preliminary.

The tax credits are then sold to companies with tax liabilities to leverage the money for the projects.

Paladino said property taxes would be paid on the residential and South Jersey Industries components of the project, not the academic buildings.

Sweeney praised the involvement of South Jersey Industries in moving its offices to Atlantic City from Folsom and kicking in $44 million.

And he said he was not troubled by the role that a subsidiary of South Jersey Industries - ACR Energy, which built a plant to power the doomed Revel casino - played in the quagmire surrounding the Revel property, now owned by Florida investor Glenn Straub.

Straub and ACR are mired in litigation and negotiations to keep Revel even minimally powered and heated this winter. ACR was blamed by several potential buyers for setting prohibitive energy terms.

"Every deal's a different deal," Sweeney said.

The Hard Rock plan had involved moving the historic Knife & Fork Inn from its location where Atlantic meets Pacific Avenue, but Paladino said the Stockton campus would leave the popular spot, immortalized in the Louis Malle movie Atlantic City when Susan Sarandon and Burt Lancaster had lunch there, in the center of the new campus.

Nearby is the empty former Atlantic Club casino hotel, which has been purchased by a Pennsylvania company that says it is planning an indoor water park.

Stockton punted on the Showboat idea after the owners of the Trump Taj Mahal said they would enforce a 1988 covenant restricting Showboat to casino hotel use.

Paladino said he was not discouraged by the city's recent track record of bankruptcy, casino closure, litigation, and job loss. (Even the Steel Pier is reportedly staving off its lenders.)

He said the office building and college campus were the right projects for the troubled yet captivating seaside town.

"It's time to turn the page and do something positive," he said. "It's not flashy. It's meat and potatoes. This is blocking and tackling."

arosenberg@phillynews.com

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Inquirer staff writer Jonathan Lai contributed to this article.