Vol. 4, No. 5, May 2007
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Keeping the Promise
The CRDA and the past, present and future Atlantic City
The New York Times recently editorialized that some actions of the Casino Reinvestment Development Authority amounted to a “betrayal” of the casino industry’s original promise to city residents to use a small portion of the industry’s revenue for better housing and neighborhoods. It will be beneficial to enumerate some facts. In the past 20-plus years, the CRDA has allocated more than $350 million for housing and housing-related projects in Atlantic City. At present, the CRDA, the Atlantic City Housing Authority and a private developer are completing a 528-home Hope VI project, 189 of which will be for low-income owners. In fact, at 1,397 units and counting, the CRDA has built more homes in Atlantic City per capita than any city of its size in the country. These included programs for first-time buyers, municipal workers and low-income sales and rental units.
As a result of the CRDA’s efforts the city is undergoing a major metamorphosis. Private developers recently purchased numerous small parcels from the agency where they will build homes and small developments. In conjunction with this, the CRDA will continue to address additional housing needs both within the city and regionally. These homes will be needed to accommodate the more than 40,000 employees expected to work at the new casino resort projects already announced. The need could be ever greater if Donald Trump and Steve Wynn consummate a deal for a new city -center project and MGM decides to build a new mega-resort in the Marina district.
The statutory changes which allowed casinos to use some of their CRDA funds as reinvestments in hotel rooms and retail entertainment districts were a positive step for the city and the state. Both the industry and through it, the CRDA, are charged in the Casino Control Act with fulfilling a variety of purposes beyond urban development. The act also called on the industry to restore tourism and convention business, and provide significant investment capital for the city and state. That is exactly what has happened, far beyond anyone’s expectations.
Atlantic City is in a never-ending international competition for investment capital. Casino executives here have to outmaneuver and outsell executives in their own companies who seek to build elsewhere in the nation and the world. In the early ’90s, Atlantic City had become stagnant. Expansion had virtually ceased, investment was going elsewhere and Wall Street analysts predicted hard times in the years ahead, particularly if competition arose in the states surrounding New Jersey.
However, it was then that the legislature passed measures which allowed the CRDA to use certain funds for the construction of needed hotel rooms and attractions like the Quarter at Tropicana (and its IMAX Theatre), the House of Blues and the expansion of other casinos and the Walk.
The gentrification of Atlantic City began at that time and continues unabated. Wall Street now calls Atlantic City the place to invest for the casino industry. Without the amendments to the original CRDA legislation, this would not have happened and the proposed $10.5 billion in new casino expansion would be a dream rather than a reality.
Finally, as a result of industry growth and extending casino obligations from 25 to 50 years, the agency will have ample funding available to invest future millions not only in Atlantic City but throughout other areas of the state. The CRDA is a unique economic development agency. We are now completing the Walk, a 600,000-square-foot shopping area straddling the CRDA-created grand entrance to the city; and also funding a major analysis by the state Department of Transportation and other agencies to develop a regional master transportation plan for southern New Jersey for the next quarter century. We are meeting with officials from South Jersey to develop an affordable housing program for the region. We also are engaged with other agencies in plans to develop new alternate energy sources.
These plans dovetail with Governor Jon Corzine’s Economic Growth Strategies. The governor has expressed his commitment to the continued development of Atlantic City as an economic resource with specific reference to the needs of our people.
The casino industry and Atlantic City have and continue to be primary economic engines of the state. I believe the industry and the state, through the CRDA, have established a vision, restored hope and assured the future of a city that time passed by. A city so blessed should have the best municipal services, schools and environment. Greatness for Atlantic City remains the goal, which neither I nor the CRDA will ever betray.
