How To Rescue Atlantic City's Economy
Written by Michael Busler
Monday, 07 December 2009 15:43
Michael Busler is an Associate Professor of Finance and a Fellow at The William J. Hughes Center for Public Policy at Richard Stockton College.
Mayor Langford recently held a meeting which brought together top casino executives and government leaders to try to figure out how to get the Atlantic City economy moving. This is important not just for Atlantic City but also for the entire state since it counts on hundreds of millions of dollars in tax revenue from the casinos. While a number of ideas came out of this meeting, there is one important idea that should be stressed.
If we listen to what the leaders said, maybe we can put them all together and come up with something that really makes sense. For instance, representatives from CRDA tell us that Atlantic City has to be more of a destination resort that can attract tourists for reasons other than gambling or to visit the beach and the boardwalk.
Some top casino executives talked about developing a plan where the city and the private sector work together. They argue that the city and the local community have never really accepted each other. This lack of acceptance has caused problems when the casino industry tries to do things that really need community support.
Some of our elected officials have voiced concern about the concept of developing improvement plans, noting that there have been many in the past that have simply failed. Perhaps State Senator James Whelan said it best when he commented that a plan would not work unless there is either funding from the state or a private developer comes in willing to spend what is necessary.
Still others said that a clean safe city is the key. Or perhaps some regulatory reform would provide the catalyst. The state government says it can commit money to build a better infrastructure to make it easier for tourists to get here. Are these good ideas?
Maybe. But the key to success probably lies in Atlantic City’s ability to draw tourists who come here for reasons that are not primarily related to gambling. In other words, AC need to draw tourists who come here for something special. Once in AC, they will likely gamble and visit the beach and boardwalk. So here’s an idea that might work.
What Atlantic City needs is a strong reason for tourists to come here. I hear people say that they are visiting a specific destination, like Disney Land, for a vacation. If we had something like that, it would draw tourists. Can we get a Disney Land here?
The way to find out is to let the business world know that the city has a large, centrally located parcel of land available to the right private investor. Perhaps Bader Field might be a draw. This site contains more than 150 acres of land with a skating rink and a small baseball stadium adjacent to it. The city is somewhat undecided about what to do there and has entertained some offers to sell the ground. In a good market, perhaps it is worth $1 Billion. Although it is probably not worth that now.
If the city let the business community know that it is interested in building something that will attract tourists, there may be some interesting responses. And the city should make whatever type of deal is necessary to lure investment. Perhaps the land is sold at a reduced price, with the condition that a large investment is made on the property. Perhaps the city forms a partnership with a developer, where the city owns the ground and the developer signs a long term lease. Or perhaps something else creative would work. I know there is a history of some abuse with these kinds of deals, but a relationship can be configured that minimizes the chance of abuse.
The bottom line is that if we listen to everyone involved, they seem to be saying that we must work together and we must attract private investment that will build something that people “absolutely have to see.” That way, tourists will come back to the city. Make it easy for them to get here, make Atlantic City a safe place and they will come.
And that will rescue the local economy.
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