Can the Revel Become a Destination for Chinese Gamblers?
The latest New Yorker, out today, has a story by reporter Nick Paumgarten about “The Death and Life of Atlantic City,” taking a sprawling look at the city’s recent decline — and focusing fairly closely on the role Florida developer Glenn Straub, who now owns the bankrupt Revel Casino, and his possible plans for its future.
Five highlights from the story:
• There has been talk of repositioning the Revel as a destination for Chinese gamblers. “[New Jersey dealmaker Vincent] Crandon says he spent a marathon weekend in town and in New York wooing representatives from a Chinese real-estate firm that had been buying up properties around the United States. Crandon’s group and the Chinese were betting that Macau, the Asian gambling mecca, was tapped out, amid a Chinese government crackdown on corruption and gambling, and that travellers from mainland China would soon be including South Jersey on their U.S. itineraries. The Atlantic City airport would be the hub for jumbo-jet charters from Asia. The margins are better if you can lure a plane from Hong Kong than a bus from Port Authority. Atlantic City, born in proximity to the population and early industrial wealth of Philadelphia, would now reach halfway around the world for money and the guests from whom to separate it.”
But Crandon’s deal to obtain the Revel from Straub fell through, and the status of these plans are apparently up in the air.
• In the meantime, the Revel may be in danger of deteriorating beyond use, thanks to Straub’s feud with the power supply company: “And so Revel remained dark: no light, heat, air, or water, no sprinklers or alarms. The city’s fire marshal deemed the building unsafe, and the city rescinded Straub’s certificate of occupancy and began fining him five thousand dollars a day. Observers wondered about catastrophic fire and debilitating mold.”
• Meanwhile, the closure of some casinos and rescue operations for others have left financier Carl Icahn with control of a quarter of Atlantic City’s gaming revenues. And Icahn doesn’t have much use for the casino workers union or its local head, Bob McDevitt. “I saved the Tropicana, which was bankrupt, and made it into one of the only vibrant and surviving casinos in Atlantic City,”Icahn tells the New Yorker. “I have also saved the Taj Mahal and have saved six thousand jobs. Bob McDevitt has caused three casinos to close and the loss of thousands of jobs. Ask yourself: Who is the villain of this story?”
• The city leans very heavily on gambling. Even Las Vegas has a more diverse income stream: “In Las Vegas the ratio of revenue is two-thirds non-gaming to one-third gaming. In Atlantic City the situation is reversed. Since 2006, gaming revenue has dropped by half, from a peak of $5.2 billion to $2.7 billion. As that stream dries up, logic suggests tapping others. And yet the casinos remain lucrative. Divided among eight casinos—that’s how many are left—$2.7 billion isn’t bad.”
• Just about every number and fact associated with the city is depressing. “The casino closures in Atlantic City have contributed to the loss of nearly ten thousand jobs, according to the Bureau of Labor Statistics, and who knows how many associated income streams, reputable or not. The city has fewer than forty thousand permanent residents; the majority of Atlantic City’s workers live offshore, in the townships of Atlantic County, which, in the first quarter of this year, led the nation in foreclosures. Property taxes in the city have doubled since 2008 and were up twenty-nine per cent in 2014, to make up for the drop in tax revenue from the casinos and in the taxable value of the property. The city is around four hundred million dollars in debt. Earlier this year, its credit rating was downgraded to junk-bond status.”
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