Atlantic City Seeks Life Beyond Gambling

Fifteen years after Atlantic City residents voted in favor of casino gambling, the resort city is still struggling. Redevelopment is now focused on a state-of-the-art convention center and non-casino hotel.

IT'S a picture of urban America at its worst: vacant blocks cleared away three decades ago for urban renewal that never happened sitting next to rows of abandoned, decaying tenements.

But Atlantic City Mayor James Whelan is unfazed as he gives a visitor a tour of the Inlet section of his city.

``We're going to have a major mall here with an indoor amusement park,'' says Mr. Whelan as he points to a block-square vacant lot. ``It will be a major entertainment center that will attract families to visit Atlantic City.''

This vision of an again-booming Atlantic City convinced voters in 1976 that casino gambling was the answer for this dying resort city. But 15 years after the advent of casino gambling, Atlantic City is scene after scene of jarring contrasts. Slums by the sea sit next to shiny glass-and-steel casino towers. Drug dealers and winos congregate on one corner; just a block away, ladies in mink enter a casino hotel.

Despite all this, the mayor is optimistic. After a decade of inaction - during which state, local, and casino officials squabbled about how money earmarked for Atlantic City redevelopment should be spent - all sides have reached agreement.

The state has agreed to spend $1.5 billion to renovate the Atlantic City airport, build a $254 million state-of-the-art convention center, and provide partial financing for a high-rise noncasino hotel and an entertainment-and-shopping complex to be built on an elevated boardwalk.

New revenue for city

When voters approved casino gambling, the goal was not only to revive this tattered ocean-front resort but also to provide new revenue for New Jersey's programs for education, seniors, and the disabled. All three groups have clearly benefited. New Jersey has realized $2.4 billion from gambling taxes in the last 15 years for those groups. In addition, Atlantic City has received $467 million for municipal services and $600 million for new housing and other improvement projects. Casinos have created 40,000 new jobs and 30,000 in related industries.

Yet in this small city of 37,000 residents, 40 percent of the children are raised in poverty. Atlantic City's unemployment rate is 16.4 percent, and a quarter of the city's small businesses have closed in the last 15 years because casino customers rarely venture into the city's decaying commercial shopping district.

Many of the new jobs have gone to residents of suburban communities near Atlantic City, where dozens of condominium developments, new-home communities, and tract shopping centers have sprung up since the first casino opened in 1978.

The problem, Whelan says, is that people expected miracles with the introduction of casino gambling. ``Real life doesn't work that way'' he says. ``It was unrealistic to think that casinos would overnight cure problems that had been festering for decades.''

Whelan says Atlantic City is no different than other urban centers that have been unable to lick problems such as poverty, crime and drug abuse. ``The tale of two cities that has been written about Atlantic City could be written about any other city,'' he says.

But Steve Perskie, chairman of the Casino Control Commission, says state government is partly to blame for the sad shape of the city. ``We wasted a decade,'' he says, blaming the state's standoff attitude in the 1980s.

Previous casino regulators took the stance that market forces would cause development outside the casinos to happen, Mr. Perskie says. ``People thought the road to a new Atlantic City would be paved with gold,'' he says. ``All we won was the opportunity to do a lot of hard work.''

Jackie Shepard, a lifelong Atlantic City resident who works as a maintenance superintendent in an apartment building, wonders if that hard work means a place for him in Atlantic City's future.

``The grand plan is to drive the poor and middle class out and make this place like Disneyland,'' he says, voicing a common concern among the city's black majority.

Mr. Shepard says the casinos have driven up rents, forcing many residents out of the city. His modest two-bedroom apartment costs $780 a month, having tripled in a decade.

Shepard says he grew up in Atlantic City and wants to stay. But crime also worries him. He often hears gunfire from his apartment as rival gangs fight over the drug traffic.

Cycle of crime

Shepard says the city is partly to blame. Atlantic City provides very little for local youth to help them break the cycle of poverty, he says. ``There is no YMCA, there is no movie theater ... People talk about how kids are violent these days, but you've got to provide alternatives.''

But for Willie Glass, things are only getting better. Mr. Glass, also a lifelong resident of Atlantic City, says the casinos have provided him a full-time maintenance job paying $30,000 a year instead of seasonal work setting up displays at the old, outdated Atlantic City convention center. He and his wife Reayna, a nurse, were able to buy a $40,000 new townhouse condominium four years ago that was built with money casinos set aside for new housing. Although it is next to several blocks of abandoned housing, Glass is proud of his condominium.

Slow turnaround

``It's taking time to turn the city around,'' he says. ``I think it's going to get better. Before casino gambling, this city was dead. If they didn't do something, it was going to disappear. Now, things are on the upswing.''

Whelan says what Atlantic City has experienced is slow, steady growth, growth that brought in more than $3 billion in casino revenue in 1993. ``Slowly, we're changing the face of Atlantic City,'' he says.

Whelan says the key to making Atlantic City boom is to give visitors options other than gambling. The typical visitor to Atlantic City today is a retired day tripper who spends six hours or less in the city. While Atlantic City entertains 30 million visitors a year, the actual count consists of 5 million tourists making multiple visits.

``There's nothing to do outside the casinos,'' says Mukhtar Muhammad, a Philadelphia resident who visits Atlantic City several times a year. ``I come in the morning and leave in the evening.''

With 50 million customers living within a three-hour radius of Atlantic City, Whelan says family entertainment will allow Atlantic City to attract a bigger audience.

But as the casino city aims for that audience, it faces a different climate from 15 years ago when the choices in America for casino gambling were the state of Nevada on the West Coast and Atlantic City on the East Coast.

``The monopoly Atlantic City had on casino gambling is gone,'' says Marvin Roffman, a Philadelphia stock analyst who tracks the casino industry.

Mr. Roffman notes that states such as Illinois, Mississippi, Louisiana, and Missouri all have recently allowed riverboat gambling. The world's largest casino is scheduled to open in New Orleans late this year, he says. Indian tribes in 20 states have opened casinos that directly cuts into Atlantic City's market, he adds. And in the next two years Roffman predicts casino gambling will be legalized in Pennsylvania, further cutting into Atlantic City's market. (Philadelphia is just an hour from Atlantic City.)

``The moral barriers are down,'' Roffman says. ``More and more states are embracing casino gambling.''

While some casinos in Las Vegas experienced double-digit revenue growth in 1993, revenues at Atlantic City casinos have been flat, Roffman says.

Roffman remains skeptical as to whether the various redevelopment projects planned for Atlantic City will come off. ``I personally wouldn't invest my money in Atlantic City,'' he says. ``It's not a growth market. There are too many other gambling opportunities in other parts of the country.''

But Nicholas Amato, president of the Casino Reinvestment Development Authority, says the redevelopment projects are definitely in the works.

Armed with $700 million in revenue from casinos, he has money to back up his talk. Mr. Amato says his authority will be investing about $200 million to prepare the site for an entertainment-and-retail complex project near the bus station. It has also contributed approximately $50 million of the cost for the non-casino hotel next to the convention center.

``People dwell on what didn't happen in Atlantic City,'' he says. ``But things are happening. This is a very exciting time to be in Atlantic City.''

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