Casinos step up Atlantic City role

Proposals include large projects totaling more than $800 million

September 09, 2001|By Jacqueline L. Urgo | Jacqueline L. Urgo,KNIGHT RIDDER/TRIBUNE

ATLANTIC CITY, N.J. - In what it touted as a major boost to the state's economy, the Casino Reinvestment Development Authority has approved casino proposals to develop retail and entertainment projects here and statewide.

Proponents say the projects could help Atlantic City evolve from a center for tacky souvenir shops and fast-food outlets to a place for shopping, dining and entertainment rivaling Las Vegas.

The proposals include large-scale projects totaling more than $800 million on the casinos' properties, mostly along or near the Boardwalk.

Six urban districts

In addition, the authority has named six urban districts in the state that would become partners with the casinos for redevelopment projects. The areas include Camden, Trenton, Newark, the Middlesex County cities of South Amboy and New Brunswick, and a combined district made up of five scattered South Jersey communities: Glassboro, Vineland, Bridgeton and Millville, all in Cumberland County; and Wildwood, Cape May County.

Only one urban-renewal plan has been outlined. Under it, the Tropicana Casino Resort plans to fund a $20 million Newark-based project to refurbish the boarded-up Hahne's Department Store as an apartment, retail and dining complex.

"The impact of this particular legislation by Atlantic City's casinos, not just on Atlantic City but on the rest of the state, will be profound because, for the first time, partnerships between these casinos and urban centers will be created," state Sen. William L. Gormley told the authority board members. "And casino money will be pumped into these urban communities in ways that can significantly affect them."

Gormley sponsored the bill creating the Urban Revitalization Incentive Program, which was signed into law Aug. 24.

Tax incentives

Under the program, the authority will award grants to the casinos in the form of tax incentives for the proposed retail and entertainment projects.

It also allows the casinos to use funding from tax credits to create projects for retail, entertainment, housing and transportation and for programs tackling such issues as job training and addiction in the urban centers.

To pay for the projects, the casinos will be allowed to use the 6 percent state sales taxes that will be generated when the projects open. The casinos will be allowed to collect the tax but won't have to pay it to the state.

Also under the legislation, five years was added to the 30 years that casinos must pay 1.25 percent of their annual gross revenue to the authority for development projects. The authority has used that money for a variety of projects, including the Atlantic City Expressway Connector.

Under the new law, the casinos that get projects funded must invest at least $20 million in one of the selected urban districts for entertainment and retail attractions, housing, and other improvements, said James B. Kennedy, executive director of the authority.

Proponents say spreading casino wealth outside Atlantic City will spur investment and create a catalyst for change in the urban centers.

"I think this legislation and this program is one of those dramatic once-in-a-lifetime-type things that is going to have a significant impact on this state for a long time to come," said board member James R. Hurley, who is chairman of the state Casino Control Commission.

When he was a state senator, Hurley supported legislation that created casino gaming in Atlantic City in the 1970s and later the creation of the New Jersey Sports and Exposition Authority, which developed the Meadowlands complex.

"I predict the impact of this will be like what the first phase of casino gaming did for Atlantic City or what the Meadowlands did for Newark, only the difference is it won't be concentrated in only one place," he said.

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