After Sandy and casino closings, Atlantic City struggles to recover

ATLANTIC CITY - It was a more optimistic time 11 years ago when David Welsh, a city tree trimmer in search of a house, heard of one about to go on the market and raced over to make an offer.

After haggling, Welsh was able to buy the 1925 two-story house just over the Albany Avenue Bridge in Chelsea Heights for $190,000.

Now, two years after Hurricane Sandy dumped four feet of water into his carefully furnished house, Welsh, 58, and girlfriend Francine Tiemann, 64, are finally past the trauma of the contractor who left them in the lurch after blowing through $62,000 worth of insurance payments and past the Hail Mary help from the Atlantic City Long Term Recovery Group, which finished the bulk of the rebuilding. Now, they're on the verge of lifting their house with a $150,000 state rebuilding grant and $30,000 in insurance money.

But here's the thing.

Even with all the money pumped back into their house, almost all the value has seemingly seeped out. Between the storm and seismic contraction of the casino industry, not to mention local tax hikes, they are wondering what they have left.

"Nothing," Welsh said, with only slight exaggeration when asked the current value of his renovated home a block from water. Although he has no plans to sell, he speculated: "If I get $100,000, I'd be very happy."

This is the challenge facing Welsh - and Atlantic City as a whole - two years after Sandy floodwaters damaged thousands of houses in the city: how to pump value back into these homes, make neighborhoods more storm-resilient, and convince people the city is still a viable, and even desirable, place to live.

"We almost need a marketing campaign for living here - and I am working on that," city planning director Elizabeth Terenik said. She'll target second-home buyers and young professionals who work in high-paying jobs nearby, for instance at the FAA Tech Center about 12 miles inland.

The pace of rebuilding has quickened in year two post-Sandy, with the nonprofit A.C. Long Term Recovery Group leading the way with 102 completed homes and 40 more in the immediate pipeline.

A year ago, the group, which hosts volunteers from around the country, had barely finished any projects. Then-director Craig Snow, who came to town with Hope Force International of Tennessee, struggled with outreach in a city where Sandy damage was mostly invisible from the outside. He said he faced language, cultural, and trust barriers in the city of 39,500, with nearly 68 percent renters.

Now, director Clarence Alston, a local educator, and Donna Nelson-Lee, the case manager supervisor, born and raised in town, have clients back in their homes across the city, including Atlantic City High School cafeteria worker (and former casino accountant) Diane Valentine Bey, proudly showing off her rebuilt front porch on Fairmount Avenue, and neighbor Gregory Cardinal, who put his remodeled house on the market after taxes jumped from $1,080 to $1,750.

Alston and Nelson-Lee say better outreach through churches and social media, their local connections, and word of mouth about renovations underway helped.

"We let our homeowners know we are partnering with them," said Nelson-Lee. The stress on people from long hotel stays, bureaucratic dramas, and uncertainty ran deep. Welsh and Tiemann had to make 17 trips to the state's Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) office in Egg Harbor Township.

With so much general need in town, the group is turning its mission away from Sandy to focus on unemployed casino workers.

"It is complicated," said Alston, a former educator. "We're feeling encouraged we were making so much progress getting people back in their homes. And then to have this economic tragedy come around, it affects people in a whole different way."

Although reports of Boardwalk damage from Sandy were widely exaggerated, there was vast damage in the city, which 2010 census figures say has about 15,000 occupied housing units. Property owners filed 2,449 general (nonflood) claims, 1,438 of which were residential, according to the state Department of Banking and Insurance. About $5.4 million was paid out on residential nonflood insurance, out of $31.5 million total, including commercial and other properties.

The state says 432 residents were approved for state RREM funding, including 164 in 2014. About 150 remain on the waiting list. So far, the state has paid out $3.7 million to 130 homeowners, with $13 million more obligated.

More than 1,000 homeowners have indicated to the city their intent to elevate their homes.

Terenik said post-Sandy recovery funding represented a vast opportunity.

The city received a $250,000 grant to "revision" neighborhoods, focusing on resiliency and rebuilding economic value. The Reinvestment Fund in Philadelphia will help prioritize areas of investment. (Twelve shovel-ready development proposals totaling 340 units await funding.)

A Sandy tax-credit program has led to the creation of 239 units of low- and moderate-income housing clustered around the city's north side.

The city persuaded FEMA to consider funding six additional recreational sites damaged by Sandy - from boat ramps and docks at Bader Field to a Chelsea Heights Nature Overlook to Pop Lloyd Stadium and two sections of the Maine Avenue promenade.

Although it might seem counterintuitive to focus on more housing in a town that just lost 8,000 jobs to casino closures, Terenik said she hoped to build demand by creating a supply that would appeal to a newer, wealthier demographic.

The city seeks to offer a 15-year tax abatement to jump-start a beachfront development known as the Breakers. And any property owners who improve their property, in fact, are eligible for a tax abatement, she said.

The city is starting a homesteading program to auction off empty lots, with the requirement of a building permit in three months, occupancy within 18. Rutgers is studying ways to develop the back bays.

The Casino Reinvestment Development Authority just authorized a $30 million loan for a $60 million project on long-vacant land near Revel with a 250-unit mid-rise apartment building aimed at young professionals. "We want to really grow the community side of the city," Terenik said.

Rowing against the tide, Terenik and others are confident the city can rebound in unexpected ways from both Sandy and the casino closings. She and Mayor Don Guardian are seeking a company to put a headquarters near Bader Field, complete with an infusion of young workers who need housing.

Off the Boardwalk, entrepreneurs are starting to open bars and brew pubs, even a bike shop, which might signal an ever-so-slight emergence of a younger demographic.

And why not? Terenik said. With less dominance from casinos, she said, "all of the other assets of the city now have a chance to flourish."