Tale of Two Cities
In our college days, a bunch of us would pile into a car and drive to New Jersey’s gambling mecca. On one of those trips down the Garden State Parkway, a favorite old tune started playing on the car radio: Fats Domino’s unforgettable warbling of “I’m Going to Kansas City.”
One of the part-time students in the car chimed in with “I’m going to ‘Lantic City, ‘Lantic City here I come.” After about 50 drunken renditions of this knock-off (we imbibed before we got in the vehicle and the driver did not partake, officer), a lifelong connection was formed. So when we recently read about the downtown Renaissance in Kansas City, MO, we also checked up on Atlantic City, NJ. Unfortunately, the two cities seem to be going in opposite directions.
In the heart of KC, a $90-million renovation of the historic Commerce Tower (it was the city’s first glass skyscraper, built in 1965) is well under way. Commerce Tower Group, which acquired the property last year, is converting it into a gleaming “vertical city” of residential and office space packed with new restaurants and retail outlets. The refurbished tower also will include a Park University satellite campus, a pre-K school, a fitness center and a rooftop lounge for black-tie cocktail parties and other A-list events. Stopping in front of the reborn Commerce Tower next year will be KC’s new $100-million streetcar line.
These two additions are part of a $5.5-billion makeover that has spawned a bevy of public and private projects in downtown Kansas City, including the Kauffman Center for the Performing Arts (pictured above), the Sprint Center arena and the Power & Light District entertainment area. The latter features an eclectic collection of clubs, restaurants and–something that denizens of Midtown Manhattan would give their left arms for–a full-service supermarket.
Here’s the beauty part: unlike poorly planned urban redevelopment efforts in other cities in decades past, KC’s planners have taken care to make sure that the current building boom increases rather than reduces residential space. In fact, since 2000, the number of people living in KC’s central business district has increased by about 50 percent, to 20,000, according to the Downtown Council of Kansas City.
We wish we could say the outlook is just as bright in Atlantic City, but the New Jersey resort–known in its 1940s heyday as “the Queen of the Atlantic Coast”–is experiencing a cascading contraction in its casino industry.
When casino gambling was legalized in AC in 1978, the only gaming competition was in Las Vegas and NJ officials had every reason to believe AC could match the exponential growth of Vegas. For a variety of reasons we won’t detail here, that explosive growth never materialized: AC’s gambling mecca hit its high-water mark with only about a dozen operating casinos.
Now, buffeted by competition from a nationwide proliferation of casinos, cratered by the Great Recession and battered by Hurricane Sandy, the big ship on the Jersey Shore is taking on water.
Between now and September 16, three of the biggest casino-hotels in AC are shutting their doors. The largest casualty by far is the $2.4-billion white elephant known as the Revel, which opened just two years ago and is now scheduled to cease operations at 5 a.m. on Sept. 2.
Billing itself as the first luxury gaming venue in AC, the Revel features a gleaming 47-story hotel tower sheathed in blue glass, a complex of wavelike lower floors and an 11-story atrium equipped with a series of vertigo-inducing escalators connecting the lobby to the reception desks on the 11th floor.
In what seemed like just a few days after ground was broken for the Revel, the specter of bankruptcy loomed over the entire project, which needed a state bailout of more than $200 million to be completed. Soon after Revel opened in 2012, it became painfully clear that the owners’ marketing strategy–touting the huge complex as a prime luxury hotel venue that just happened to have some gambling associated with it–was not going to succeed. By the time they realized the need to put Revel’s casino front and center, it was too late.
The Showboat casino-hotel, next door to the Revel, is closing at the end of this month; on Sept. 16, one of the pioneers of AC’s casino industry–the Trump Plaza–will forever shut its doors. A fourth AC casino, the Atlantic Club, shut down in January. According to the state’s Casino Reinvestment Development Authority, the four casinos that went belly-up were home to 413,700 square feet of gambling space, nearly a third of AC’s total.
Two statewide initiatives which were conceived to inject new life into Atlantic City’s casino industry also have rolled the dice and come up snake eyes. Last year, when Internet gambling was legalized in NJ, officials estimated that online gaming run by AC casinos would pull in $1.2 billion in revenue in the first year of operation. New Jersey residents proved to be far less enthusiastic about placing bets from their living rooms and dens: online gaming in NJ will yield a paltry $34 million this year, according to the latest estimates.
Even worse, the long-awaited arrival of legalized sports gambling in NJ appears to have hit a dead end. In 2011, voters approved a statewide referendum to legalize sports betting; two months later, Gov. Chris Christie signed the measure into law and state legislators–eagerly anticipating an annual jackpot of more than $2 billion from sports wagering– instructed state attorneys to bring a test case to the U.S. Supreme Court, hoping the referendum results would induce the Supremes to grant NJ an exception to a 1992 federal law (ironically written by Sen. Bill Bradley of NJ, a former professional basketball player) that limits legal sports betting in the U.S. to Nevada and a small part of Delaware.
Unfortunately–and we’ll keep the gambling metaphors going for another minute here–this effort crapped out when the nation’s top court declined this year to take up the case. NJ legislators attempted a last-ditch end-run by passing a bill they said would allow New Jersey to circumvent the 1992 law. Realizing the bill had less chance of withstanding a legal challenge than the average poker player has of pulling a royal flush, Gov. Christie vetoed the bill.
To add insult to injury comes a report this week that a bag of cash from the Revel fell off the top of a Brink’s truck that was delivering it to the bank. It was not recovered. You know it’s time to stop gambling when your luck is that bad.
So, at least in terms of the recent trajectories of KC and AC, it looks like building trumps betting (pun intended, Donald). With that said, we’ll fold our hand, leave the table and cash our chips before we lose another samolean.