N.J. to pave the way for restart of Revel Casino project

ATLANTIC CITY - As hundreds of construction workers in hard hats literally hung from the unfinished rafters of the Revel Casino atrium, Gov. Christie signed off Tuesday on his plan to turn things around in this battered gambling town.

They erupted into loud applause as the Republican governor announced that work at the site - halted two years ago when financing dried up - would resume.

"Construction will continue next week, putting all of you back to work!" Christie proclaimed.

With that, he said, Atlantic City was on its way to rewriting its next chapter - one that includes the state's taking charge of the casino and tourism district, broadening the powers and duties of the Casino Reinvestment Development Authority (folding the Atlantic City Convention and Visitors Authority into its sphere), and streamlining casino regulations to attract investment.

And, on top of that, giving the state a 20 percent equity in the $2.5 billion Revel.

In exchange for a share of the casino's revenue, the state approved $260 million in tax-increment financing by the New Jersey Economic Development Authority to support infrastructure improvements in the South Inlet neighborhood next to Revel and to pave the way for completion of the project.

"This is to give Atlantic City the tools it needs to be the destination it was meant to be," Christie said after signing Senate Bill 11.

That measure authorized creation of the state-run Atlantic City Tourism District. Within its boundaries, the Casino Reinvestment Development Authority will have power to establish land-use regulations, implement a master plan, and promote public health and safety initiatives, among other things.

"Today's announcement was very exciting for the entire community," said Robert Boughner, chief executive officer of the Borgata, on which the Revel project was modeled. "The clean-and-safe initiative, if executed well, will not only create the perception, but the reality, of clean and safe."

Joseph Weinert, of Spectrum Gaming Group L.L.C., of Linwood, N.J., said Christie's actions "make a strong statement that the state recognizes Atlantic City's importance in the overall scheme of New Jersey's economy."

Gaming analysts who have been recording the resort's struggles - 28 straight months of revenue decline - were cautiously optimistic.

"We are hopeful that state intervention can stop the revenue bleed in Atlantic City and help establish a base for the seaside resort town to grow and offer visitors an experience they can't achieve in other regional markets," said Dennis Farrell Jr., managing director with Wells Fargo Securities L.L.C.

"Establishing a safe Boardwalk district is a step in the right direction, but Atlantic City needs to differentiate itself from its regional competitors, and allowing for smaller boutique casinos is not the answer."

Farrell referred to a measure signed into law by Christie last month that allows development of 200-hotel-room boutique casinos instead of the mandatory 500 rooms. It was among a package of bills lawmakers had approved since November to revitalize Atlantic City and the state's struggling horse-racing industry after reviewing the governor's plan last year in three Gaming Summit hearings.

"I would call it a step in the right direction," said analyst John Kempf, of New York's RBC Capital Markets Corp., "but it will not change the current trend of former Atlantic City customers gambling at casinos closer to home."

An analysis released last week by Spectrum Gaming predicted that just about $3.1 billion would be generated this year by the 11 Atlantic City casinos, down 13 percent from last year and nearly 41 percent off their 2006 peak, when they generated $5.2 billion from slot machines and table games.

Just as troubling, the report said, is that Atlantic City will lose more ground to Pennsylvania, whose first casino opened in 2006. The Shore casinos are expected to generate nearly $2.2 billion from slots by 2011's end, less than Pennsylvania's casinos for the second consecutive year.

Pennsylvania's 10 gambling halls are expected to exceed $2.27 billion, their 2010 gross slots revenue total, because SugarHouse on Philadelphia's waterfront opened Sept. 23 and will be fully operational this year.

For three decades, Atlantic City had a virtual monopoly on gambling in this part of the country - its first casino, Resorts, opened May 26, 1978.

On Tuesday, Christie called symbolic his choice of the Revel site - where all work had halted in January 2009.

Revel, he said, was a deal-breaker for Atlantic City. Once fully built out with two hotel towers, Revel will distinguish the resort as an overnight, amenity-rich destination apart from the convenience casinos in Pennsylvania, Delaware, and New York.

"No question," Christie said, "this project is critical." A finished Revel would be the first new casino since Borgata opened in July 2003.

Though it still needs about $1.15 billion in financing, Christie said Revel would be announcing within days that it had obtained the necessary loans from Wall Street banks.

The casino will be on track to open in June 2012 after construction resumes next week, the governor said.

Revel will employ 5,500 permanent employees and about 2,000 construction workers, including Oscar Forest, 48, who has been unemployed for two years. He said his jobless benefits ran out in November.

"This is what I have been waiting for for two years," said the Galloway Township carpenter, holding up a "Jobs-Jobs" placard from the N.J. Building and Construction Trades Council.

"This is what we've all been waiting for."