The Big Gamble : Atlantic City Bet Its Future on Casinos; Now, Many Say They Have Made the Resort’s Problems Worse

He wasn’t invited to the party, but Jerome Cunningham still feels like drinking. On a scorching afternoon, he stares across the street at the most famous boardwalk in America, hoists a bottle of cheap red wine and offers a toast:

“Party on, baby,” he says, slumping against an abandoned car. “I’m the invisible dude, and I don’t count. But this town is jumping. They just didn’t build it for me.”

From where he sits, the homeless man sees tourists scuttling down the boardwalk and the casino signs of Bally’s, Caesars and Sands towering above. He sees gleaming tour buses packed with senior citizens and stretch limos whisking high rollers into the swank hotels.

It’s a gambler’s paradise with ocean views, a hurly-burly of hype and promotion that lures 32 million visitors a year, making Atlantic City the nation’s No. 1 tourist attraction. But to Cunningham and the folks who live here, it might as well be South Bronx-by-the-Sea.

On the other side of Atlantic Avenue-- his side--Cunningham sees prostitutes working the street and a gang of teen-agers dealing crack. Nearby, rows of boarded-up summer homes bake in the sun, their fading “For Rent” signs mocked by sea gulls circling overhead.

When most Americans think of Atlantic City, they conjure up images of gambling, saltwater taffy and the Miss America contest. A place where sunbathers jam the beaches, Sinatra packs ‘em in and more than 18,000 slot machines wait to be fed. They think of a board game, a hit movie and the one remaining city where Donald Trump is still a big shot.

But there is another side to the community, one that tourists rarely see. Although gambling has increased the tax base from $320 million in 1976 to $5.5 billion today, nearly half the residents receive public assistance. Fifteen years after gambling was legalized, the resort has rampant drug abuse, widespread urban blight and the highest crime rate in New Jersey.

Once a haven for white middle-income families, Atlantic City’s population of 39,000 is now made up mostly of young African Americans, Latinos and the elderly. More than 2.2% of the residents are homeless--a higher percentage than that of many large cities--and the number swells every time a new casino opens, according to a county survey.

“We have real social problems here, and we can’t kid ourselves about that,” says Mayor James Whelan. Beyond that, he adds: “The town needs to become a real vacation resort, where people will stay for several days and not just go home after a few hours. We’re just not there yet.”

Casino owners point out that they have contributed millions of dollars to programs for the elderly and disabled, and they insist that they never promised to rebuild the community. But Dana Nixon, a 30-year-old blackjack dealer, sees it differently.

“I thought the whole idea of the casinos was to build up the city,” he says. “Donald Trump built a $1-billion casino here, but two blocks away he can’t help anyone else, and it’s a dump. I wouldn’t want to live here, because it’s not safe, and it’s getting worse.”

It’s also embarrassing. State and local officials wring their hands over the contrasts between rich and poor, but the seaside city’s problems never seem to get the attention they deserve. One reason is that bureaucrats have been clashing for years over priorities. More important, the city government has a history of corruption and is still something of a national joke.

For example, several current and former members of the City Council are on trial for bribery. The town’s previous mayor, James Usry, awaits trial on similar charges. He’s the fourth mayor out of the last six to be indicted; three went to jail.

Meanwhile, five top officials of the city’s largest labor union, the hotel workers, stepped down last month rather than face trial on federal charges that they were controlled by mobsters. Prosecutors said organized-crime leaders had plundered the union’s welfare fund.

The sputtering economy is another problem, with the town’s 12 casinos groaning under a $3-billion debt, much of it from junk-bond financing. They recently posted a $55-million loss for the first quarter of 1991, the largest such decline in their history.

Amid this gloom and doom, the problems of Jerome Cunningham and other Atlantic City residents somehow get shunted. To be sure, there is talk of building affordable housing for them and expanding social services. Over the next 25 years, officials say, the casinos will contribute more than $1.4 billion for a wide range of redevelopment projects.

But residents have grown skeptical of such promises.

“I don’t think anybody cares that much about us,” says Cunningham, 27, who sleeps in boarded-up buildings. He worries about being attacked and maybe even left for dead on the street. If that happens, he suggests, tourists won’t give him a second look.

“When folks see me on the street, they just freeze up,” he says. “I hear the car locks clicking, and they step on the gas. People came here to party. They don’t see nothing else.”

For other residents, the town’s decline can be explained with one word: greed .

As they clean up a construction site near the gambling strip, carpenters Todd Toulson and Gary Gethers remind a visitor that the board game Monopoly is based on the streets of their hometown. And it’s more than just a coincidence, they say. From the cheap housing on Baltic Avenue to the rich Boardwalk hotels, the parallels are chilling.

“Look, Boardwalk is still the best deal in town,” says Toulson, 34. “I think the casinos took advantage of everybody here because people really believed that they would make things better. And they didn’t. They made a killing, and the rest of the city is a pit.”

Gethers, 38, says he’s trying to make a decent living but complains that there are few construction jobs in town because land costs are so high.

“The whole city is a Monopoly game,” he says. “You buy up all the land in sight, the price goes up, and pretty soon nobody who lands here can afford to stay here. If you own the land, you control the game. If you control the game, you win every time.”

Some residents give the gambling industry more credit, mostly for creating an estimated 40,000 jobs. Lucille Robinson, 30, has been a cocktail waitress at Bally’s Park Place for nine years and praises the casinos for giving people like her an opportunity. But she says the city has gone downhill since gambling began, mostly because of increased crime.

“I’m grateful for the chance I had to stay here and to make a living,” she says. “But I’ve never seen so much crime come into town as it did after the gambling came in. I knew 15 guys from my high school who got shot because of drug deals, and that wouldn’t have happened before the casinos came in. All that new money attracted a lot of bad people.”

Fifteen years ago, folks here were literally dancing in the street.

After a lavishly funded campaign by casinos and other business interests, city voters approved a 1976 referendum paving the way for legalized gambling. They all figured their ships had come in, whether they were landowners or wage earners looking for a better job.

Today, many residents, community activists and public-interest lawyers say there was an implicit agreement by the gaming industry to help redevelop the town, which had fallen on hard times. Once a flourishing resort, Atlantic City started losing customers in the 1950s with the advent of cheaper air fares and home air-conditioning, both of which decreased the beach town’s allure. Buildings began deteriorating, and middle-income residents fled for the suburbs.

Casino owners agreed that Atlantic City needed an economic boost, pledging to create thousands of jobs. But that, they say, was the limit of their commitment. Never was there any agreement to rebuild the run-down neighborhoods behind their gambling palaces.

“The casinos made no such promise,” says Steven Perskie, who directs the Casino Control Commission, the state agency that supervises New Jersey’s gaming industry. “It’s the city and the state which failed to revive this city, so you can more properly blame them.”

These days, Perskie is pushing for state laws that would remove key restrictions on the gambling industry and boost profits. Legislators are considering plans to expand the number of games and introduce sports betting, he says, because the casinos need less regulation.

But others disagree. Just because government officials are inept doesn’t mean casinos should be given a free hand, says James Hughes, a professor of public policy at Rutgers University. A good example, he says, is the real estate speculation that swept the town after the 1976 vote.

“Suddenly, everybody in Atlantic City who owned land was a potential winner because every plot of land, no matter how small, was a potential casino,” Hughes says. “City officials were unprepared for this. It became more economical for owners to clear people out of buildings or knock down the buildings, and then wait for the best deal to come along.”

Speculation fever eventually resulted in the loss of some 4,000 low- and moderate-income units. Even though the market has cooled, the cost of land is still extremely high, making it difficult for developers to build and sell low-cost housing without huge subsidies.

These upheavals affected everyone, especially seniors who had planned to retire at the shore. In 1978, for example, bartender Tony Venafro sold his $8,500 home to speculators for $150,000. The house was demolished and the land remains vacant, says Venafro, 71. But the windfall enabled him to retire and build a bigger house in a nearby suburb.

Others are bitter. As she collects donations on the boardwalk for a local hospital, 88-year-old Mildred Watts says the resort town where she has lived for 31 years is no longer safe. And many of the elderly people who voted for gambling now feel like suckers.

“It was the seniors that helped bring the casinos here, and for that all we get a kick in the backside,” says Watts. “The landlords want you out. All they want are casino workers for renters. I live across the street from the Tropworld casino, and I wouldn’t give them a dime.”

Adding it all up, there’s plenty of blame to spread around, says community activist Cora Boggs: “It’s the city, it’s the state and it’s the casinos. I can’t believe gambling has been here for so many years and so little has really happened for our city.”

Boggs points out that it was not until 1985 that the state finally created an agency to build low- and moderate-cost housing in the city. The Casino Reinvestment Development Authority collects 1.25% of the gambling industry’s annual gross revenues and recently opened its first major project, a 130-home development funded by Harrah’s.

A second project is also planned, but several casinos have protested, saying it would be an inappropriate use of their money. They argue that the funds would be best used to help build a new convention center and airport, both of which could bring in more tourists.

Meanwhile, the town continues to deteriorate. At the Atlantic City Rescue Mission, a privately operated homeless shelter, there are 240 beds and extra sleeping spaces in the dining room. The number of homeless has grown from 12 to 14 in the early 1960s to the larger numbers today, says Dick Haviland, who directs development at the shelter.

Many of his clients were drawn to Atlantic City because of the glittering casinos, where they went broke. Others, such as the mentally ill, got on a bus and came here because of television commercials advertising million-dollar jackpots, he says.

Haviland praises the casinos for helping the shelter with leftover food. But he and others agree that charity alone will not get the homeless--and the community--back on its feet.

“I remember the times when you used to be able to sleep on the boardwalk or on the beach here,” says Richard Mann, the shelter’s chaplain, who grew up at the Jersey shore. “You can’t do that anymore. . . . It’s become a dangerous and a very different world.

“People shouldn’t blame gambling for everything, because casinos have brought some good to Atlantic City. But the dream never came true here. Especially for the people who live here.”