Cordish goes for another winner

Atlantic City hopes developer can match Power Plant success

Development

August 20, 1999|By Kevin McQuaid | Kevin McQuaid,SUN STAFF

David Cordish recalls that critics jeered when his Baltimore development firm announced plans to redevelop the Power Plant downtown.

At the time, there was good reason to be at least skeptical. After all, Six Flags Corp. -- a publicly traded entertainment giant much larger than Cordish -- had given up on an adult theme park there after years of trying.

"People said, `Don't do it. What do you know that they don't?' " Cordish, chairman of the Cordish Co., said yesterday. "My own father said not to do it. What we did differently was in our approach. You have to think out of the box."

Today, the $25 million Power Plant is credited with being the linchpin in an Inner Harbor renaissance. Tenants such as ESPN Zone, Hard Rock Cafe and Barnes & Noble have brought new visitors, new money and new life.

Now, officials in Atlantic City are hoping that Cordish can think outside the box there, too, and succeed where others have failed in developing a 15-acre, largely barren tract that sits between the tourist destination's famed boardwalk and casinos and a new $254 million convention center.

And, unlike earlier attempts by the Rouse Co. and the Mills Corp., Cordish has some key things working in its favor that are likely to boost its chances of success.

Most notably, casino operators now seem willing to cooperate with and even encourage nongaming activities.

"People have looked at the Las Vegas experience over the past five years, and seen the model for what can be done," said Jim Kennedy, executive director of the New Jersey Casino Reinvestment Development Authority.

"It's helped every casino there," Kennedy added. "Today, too, the companies behind the casinos aren't afraid of mixed-use competition. The philosophy has really changed. It hasn't always been that way. Certainly it wasn't that way five years ago."

Rouse was the first developer hired by the authority -- in October 1993. But it pulled out of the project two years later, contending that public funding of $175 million was inadequate and because it grappled with the authority over the parameters of the site to be developed.

Kennedy points out that since Rouse's involvement, Atlantic City has opened an $85 million hotel near the convention center and installed $18 million worth of roads and other infrastructure.

"It's physically a very different site now," Kennedy said. "It was a much more speculative project than it is now. Five years ago, no one would walk across there. It was a pretty seedy part of town. But we acquired it, tore down some buildings and now it's a series of surface parking lots."

After Rouse's departure, Mills was tapped in June 1998 to turn the site into a discount mega-mall. But the Virginia-based company said its other projects made it impossible for it to meet the authority's deadline to have a project up and running in three years. Now the commission has turned to Cordish.

But just as much as Cordish's presence, it is the Las Vegas model that has sparked the most optimism.

"In Las Vegas, we've seen a dramatic evolution," said Marc Falcone, a Bear, Stearns & Co. gaming industry analyst. "There's been a movement of revenue. All the top restaurants, along with all the top retailers, are there now. It's been a successful turn of events. Visitation has skyrocketed, and they've seen an increase in gaming revenue. So I think what you're seeing is the casinos and the government trying to redefine Atlantic City."

Cordish also is hoping to leverage existing tourist traffic, gaming interest and the city's beaches and Boardwalk.

Cordish points out that while the average gambler spends about four hours per day in a casino, Atlantic City presently offers little else in the way of entertainment. The city attracts 37 million visitors a year, and gamblers there spend $4.5 billion.

"People who go there are there all day and all night, and they want to do something else besides gamble," Cordish said. "My feeling is more is more. It's an expanding pie, not a static pie."

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