Atlantic City : Its Gamble With Casinos Hasn’t Paid Off
The Parker Bros. people showed up here recently to propose a theme park based on Monopoly, the real estate trading game modeled after the streets, utilities and railroads of Atlantic City.
“They were very nice to us,” recalled Mayor James L. Usry, who heard them out, then turned them down.
“No one’s missing their meals and not having a place to stay in Monopoly,” he said with mounting irritation.
“This is not a game. This is real life.”
That people are both homeless and missing meals rankles the mayor, who for nearly two years has presided over a city in which the distinction between fantasy and reality has been getting hazier all the time.
The stuff of games--the buying, renting and selling of property, the clicking of roulette wheels, the dizzying spin of lemons, cherries and bars--keeps on colliding with what has, for too long, been the stuff of real life in Atlantic City: the hunger and homelessness, the boarded-up buildings, the lingering atmosphere of decay.
Alfonso Davis, a 32-year-old unemployed father of four who has lived here all his life, is one of many casualties of the collision. “Sure, my friends go to the casinos,” he said. “They go in and walk around and look for money people drop on the floor.”
Like many who supported the 1976 referendum legalizing casino gambling, Davis thought he was voting for more affordable housing, a revitalized business district and a safer, more livable city, as well as for blackjack, roulette and craps. Like many residents, the majority of them black or elderly, Davis said he has gotten less than he bargained for.
“There are 11 casinos here now and I haven’t seen no improvements yet,” Davis said. “A whole lot of people is mad At them.”
That a whole lot of people are mad at the casinos is not in dispute. What is less clear is how much of the blame for the state of Atlantic City can be laid at their gilded doors.
Judging by the statistics, things appear greatly improved as a result of the referendum, a last-ditch attempt to save a dying city.
By 1977, America’s Most Popular Resort Destination, once the playground of presidents and the proving ground of such stars as W.C. Fields, had clearly fallen on hard times. That year, Atlantic City had 40,000 residents and just 13,000 jobs. Only 7 million visitors took a walk on the Boardwalk. And property tax revenues amounted to only $24 million.
It was a far cry from the Atlantic City whose memory old-timers still mourn; the elegant resort where tuxedoes and gowns were proper attire for seaside strolls against a backdrop of luxury hotels, where guests were met at the railroad station by horse-drawn carriages, where gentility reigned in a world of diving horses, carnival rides and saltwater taffy stands.
Compared to 1977, today’s numbers are staggering: Casino gaming has resulted in 40,000 new jobs, $3.1 billion in new investments in property and equipment, and $718 million in tax revenues for senior citizen programs alone.
Atlantic City’s 11 casinos drew nearly 30 million visitors in 1985, a year in which the gaming industry paid $750 million in wages and benefits, as well as $63.4 million in property taxes, 67% of the bill for the entire city.
So why has the face of Atlantic City not changed? Why does it continue to look, as longtime residents are wont to describe it, like “11 Taj Mahals in the midst of a war zone”?
Why are there so many vacant lots and boarded-up buildings? Why is street crime so high and the rescue mission so crowded? Why all the signs, like the one at Deauville Jewelers on the Boardwalk: “Lease terminated. Thank you for a great 20 1/2 years”? Why is there still no major supermarket? No movie theater?
‘Continental’ Image
Among those with a stake in the answers are officials in Florida, Louisiana, Michigan and West Virginia. All are considering casino gambling.
In its casino campaign literature, the Committee to Rebuild Atlantic City stressed that any casinos built here would bear little resemblance to their Las Vegas counterparts:
” . . . The atmosphere will be very different, with Continental-style casinos patterned after those in Monte Carlo and the Caribbean. They’ll be quiet, tastefully decorated rooms. . . . There will be no slot machines anywhere.”
The proposal was altered to allow the one-armed bandits that now dominate the casinos, but the notion of “Continental-style casinos” continued to nurture hopes that the city’s lost elegance would be restored.
Size of Football Field
The Golden Nugget’s casino, one of the smallest, is nearly the size of a football field, a vast expanse of gold leaf, mirrored tile and crystal chandeliers. On one wall is a mural depicting ladies in Gay ‘90s dresses escorted by dapper beaus amid roller coasters and steamer rides. It is as close as the city comes to recapturing the past.
Beneath the mural, old ladies in pantsuits and young couples in leather and sequins pump quarters into a bank of slot machines. Kenny Rogers’ recording of “The Gambler” wafts from strategically placed speakers. A man in an Army fatigue jacket, his paper change cup empty, cradles his head in his hands in front of a dollar slot machine.
Farther down the Boardwalk at Bally’s Park Place, a meeting room is decorated with pictures of the Blenheim Hotel. That was one of the first reinforced-concrete structures; its construction was supervised by Thomas Edison.
In the movie “Atlantic City,” you can see the landmark being blown to smithereens to make room for Bally’s.
Too Far Downhill
By the time the Blenheim and other grand hotels were being obliterated for the casinos, recalled civic leader Albert Marks Jr., “the town had gone so far downhill that there wasn’t the strength left for a public outcry.”
The gaudy neon of Las Vegas’ Glitter Gulch does not glow above Atlantic City’s casinos, a concession to the “very different” atmosphere that was promised. But inside, adjectives like “Continental” do not come to mind.
“This is not a high-roller town. This is a blue-collar town,” said Marks, who added that the 1,200 buses rolling into town on any given day carry “mostly little old ladies with their Social Security checks.”
Such visitors don’t do much shopping. Nor do they stay overnight. About 90% of them are day-trippers, Atlantic City being within a few hours’ drive of a quarter of the nation’s population.
Guests find little reason to leave the casinos, self-contained worlds with their own stores, restaurants and entertainment. Some offer occasional views of the ocean. Otherwise, it is hard to tell night from Day.
Organized crime has also been among the visitors to Atlantic City.
Hard to Police
James Flanagan, deputy director of the New Jersey Division of Gaming Enforcement, said extensive investigations and rigid licensing requirements ensure that organized crime is kept out of the casinos themselves. But the laundries, food suppliers and others who provide support services are harder to police, Flanagan said.
“Many are fronts for organized crime. We investigate those,” he said, adding that “when the fire gets a little hot, most of them get out of town.”
The U.S. Supreme Court, in an unusual decision, recently gave the Division of Gaming Enforcement regulatory authority over Atlantic City labor unions. One result was the removal of Frank Gerace as president of Local 54 of the Hotel and Restaurant Employees and Bartenders International Union, after law enforcement officials linked him to alleged organized crime figures.
If you turn your back on the Boardwalk, ignoring the fleets of buses parked in a sea of blacktop, you see how little has changed.
Blighted Neighborhood
The business district, with its shabby, outdated facades, is still largely deserted. Empty tenements, rubble-strewn vacant lots and broken glass still dominate the Inlet, the city’s most blighted neighborhood.
The Atlantic City Rescue Mission, which 10 years ago had a nightly population of maybe six or seven, now routinely packs 150 homeless men into a building designed for 25. Spokesman Bill Seuthrey estimates the area’s homeless population at about 350. Those who don’t make it to the shelter can often be found sleeping under the Boardwalk, he said.
There is another set of numbers to consider: One in four Atlantic City residents is still living below the federal poverty level of $10,609 for a family of four. Three in 10 housing units are federally subsidized. Three of the last six mayors went directly to jail. They did not pass Go.
Gaming industry spokesmen say these and other problems have been here far longer than casinos.
They say that they’ve kept their promises to provide more jobs, more tax revenue and more tourist business, and by anyone’s yardstick, this is true.
Land-Buying Spree
But one of them has done something else, something not foreseen--or controlled--by the city. Resorts International, the first to open a casino here, also went on a land-buying spree. According to tax assessor William Ferry, Resorts owns or has under option more than $700 million worth of land--14% of the city’s assessed property--making it by far the biggest winner at Atlantic City’s own private version of Monopoly.
Among Resorts’ holdings are about half the city’s vacant, developable parcels, as well as a third of all Boardwalk frontage zoned for casinos.
Although Resorts has done plenty of buying, it has done little developing, and neither has anyone else.
City officials say speculation by Resorts and others has precluded the development of much-needed low-income housing they envisioned a decade ago.
Rising land values have made such development a dubious proposition. In 1975, the 572 property sales reported to the city were worth $15.3 million. The 1,600 sales that took place during 1985 were worth $363 million.
‘The Black Knight’
“This industry could have been Robin Hood. It could have been Lancelot. Instead,” Usry said bitterly, “it has turned out to be the Black Knight.
“Most of the blighted areas are owned by the casinos. They said they’d help revitalize the town, repair the social and moral fabric. That’s why we allowed them to come in. It was not a license to create a tale of two cities.”
Steve Norton, vice president of Resorts, objects to the word “speculation” in reference to his company’s transactions. Instead, he said, Resorts has been engaging in “assimilation, trying to expand the area for development between the existing hotels and the urban renewal tract.”
He said Resorts has offered some of its land at below acquisition cost to non-casino hotel developers. “The problem is that there are not that many people out there who want to develop. Construction costs are too high.”
The underlying problem is more fundamental: The mayor cites the need for low-income housing, while Norton argues that “the people Atlantic City needs to attract are middle- and upper-income, people with disposable income who can help the tax base.”
“Low-income housing isn’t the casinos’ role,” Norton said. “You can’t expect the casinos to take on the role of government.”
Unreasonable Expectations
That is one of several expectations industry spokesmen call unreasonable. They also say previous efforts to help the city were hampered by the ineptitude and corruption of past administrations.
“We’ve done it: We’ve arrested the decline and returned a sense of identity, pride and purpose to Atlantic City,” said Tom Carver, spokesman for the Atlantic City Casino Assn. “We’ve created the most dramatic, dynamic economic explosion this state has ever known or will know.
“But the expectations far exceeded the reality. It was anticipated by many that the rewards would be quick and great.
“The Casino Control Act stated that casino gambling can be a unique tool of urban development. It is just that, a tool to be used. The economic benefits have to be turned into improvements to the infrastructure, reinvestments. That never took place. City government, up until now, hasn’t done a damn thing,” Carver said.
As a result, Norton said, people who have a choice don’t want to live here. “I wouldn’t live here. I’d be afraid to have my kids in these schools. I’d be afraid of the crime and the drugs,” he said.
Development has also been stalled by a series of postponements granted by the Legislature for a citywide reassessment of property first ordered by the county in 1978. The latest moratorium expires at the end of July.
Delays Called Necessary
Usry said the delays were necessary to protect working-class property owners who would be unable to pay higher taxes.
But those who have benefited most have been speculators who have saved hundreds of thousands of dollars in taxes on their holdings of vacant land. The casino association estimates that in the Inlet alone a revaluation of unimproved property would net the city $4.2 million.
Al Marks has watched the gaming experiment unfold from his vantage point as senior vice president of Advest Group Inc., a private investment banking firm, board chairman of the Miss America Pageant, and past president of the Chamber of Commerce. Marks, who has racked up 11 “Man of the Year” titles from civic organizations, applauded the casinos’ efforts and bemoaned a law prohibiting casino employees from becoming involved in city government.
“There’s a lot of top managerial talent in the casinos who aren’t allowed to lend their expertise to the problems,” Marks said. “At the same time, every ill in this city is laid at the casinos’ door. It’s grossly unfair.”
He pointed to the billions the industry has pumped into the economy and said: “Sooner or later, you need a conduit for that enormous amount of money. Nobody has pointed the way.”
