Vol. 5 No. 3, March 2008
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Banking Bader
The freight train that is the development of Bader Field keeps moving forward and picking up steam. My question is “Why?”
Atlantic City is currently in a major business slump. We’ve seen gross gaming revenues decline for the first time in almost 30 years. Some have speculated that the deterioration is due to increased competition from Pennsylvania, New York and Delaware. And when you add the partial smoking ban to the equation, it’s exacerbated.
My personal opinion is that the bad economy is having as much impact, if not more, than those factors. Whatever the reasons, revenues are down for at least the next year, if not longer. So what’s the rush to develop Bader Field to add even more casinos to a market that is now clearly struggling?
We’ve already got one new billion-dollar-plus casino in the ground. Another has been announced by Pinnacle Entertainment at the old Sands site. And a third, this one a massive $5 billion project, is being planned for the Marina District adjacent to the Borgata and Harrah’s. The history of new casinos in Atlantic City is that they first cannibalize the market and then grow it. It’s going to take at least 10 years to absorb the increased capacity of these projects, and if you throw the development of Bader Field into the mix, it will undoubtedly cause several existing casinos to fail.
Is anyone considering that?
Most troubling is the involvement of the Casino Reinvestment Development Authority. Here’s a group that exists because it is funded by the casinos. You would think a man as skilled and effective as Tom Carver, the CRDA executive director, would understand that, with three new mega-casinos, he’s going to get more revenue to invest in CRDA programs. Maybe he’s looking out even further and expecting another massive windfall from any casino(s) that would be developed at Bader Field. I don’t know, because things are moving so fast.
Another bad sign is a bill introduced into the legislature by Senator Jim Whelan that would take Bader Field out of the hands of the city and give it to the CRDA. Now those who remember “Atlantic City Mayor” Jim Whelan may recall that every time someone wanted to take something from the city, he went ballistic. I can’t imagine he would sit still for something so egregious during his term. So what’s the reason he’s proposing this bill? I’m not saying the current administration is capable of running a bidding process and ensuring its transparency. Far from it. This administration is probably the worst we’ve seen in many years, continuing, as it has, the ties to disgraced and convicted former City Council President Craig Callaway.
What I’m saying is, there is no rush! Back off on development of Bader Field for at least five years. If the land is so valuable now, it should be that much more valuable in five years. In five years, we’ll have a much better handle on the Atlantic City market vis-à-vis regional competition. We’ll know more about the economy. And at least two of the new mega-casinos should be open, giving us a better idea of how capable the AC market is at absorbing such a massive increase in supply.
I’m always suspicious about development deals involving city government. Callaway was taking bribes related to the development of Bader Field. That alone should be enough to delay any development. Proponents of Bader Field development say the city will use the revenue for property tax relief. Won’t the new Revel, Pinnacle and MGM projects produce enough new taxes to do that on their own? Let the citizens of Atlantic City sort out our hideous government. Let politicians five years from now begin to think about how Bader Field will be developed. Let’s make sure the process is well thought out and completely transparent.
That’s not the case now. Who is pushing the involvement of the CRDA rather than the city? Why is a former mayor so willing to usurp the authority of the city? And why isn’t anyone thinking of the obvious problems that development of Bader Field would create? Let’s stop. And think.
