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Pauline's Prairie: Great potential or big problem?

Promises for Pauline's Prairie could fall flat, again

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There was the Uptown Urban Renewal Tract. The South Inlet Transportation Improvement Project. The Lighthouse District.

Developers pitched a European-style mall. A baseball stadium. Gondolas.

There was a $300 million proposal. $75 million. $41 million.

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In the end, though, there was just Pauline’s Prairie.

During the mid to late 1960s, Atlantic City’s housing czar, Pauline Hill, dismantled an entire neighborhood to make way for commercial development.

Eighty acres in the city’s South Inlet section were razed. Forty-five-hundred people were displaced.

But development, in large part at least, never came. In the ensuing decades, the South Inlet remained a scattering of mostly low-rise housing pocked by barren lots.

Now, the neighborhood finds itself on the cusp of revival.

Its reconstruction, effectively from scratch, could begin this year. Or the plan could collapse, as so many others have, and the South Inlet could remain perennially stagnant.

The Casino Reinvestment Development Authority’s board of directors has until Sep. 30 to decide.

* * *

North Jersey developer Wasseem Boraie says he can succeed where one company after the next has failed: on Blocks 132 and 133, the most development-resistant parcels on the Atlantic City Tax Map.

The twinned open fields, on eight acres bounded by Atlantic, Pacific, Delaware and Connecticut avenues, are vestiges of an unfortunate urban pasture once 10 times as large.

Philip Weinberg, 61, who runs Mel’s Furniture, a family business that’s been in the South Inlet since 1954, has been looking at the forlorn tract since his childhood.

“Everyone says they’re going to do something,” he says. “When you first hear something, you get all excited. But then when time goes on and nothing happens ...”

In 2012, Boraie Development trumpeted a plan to build a residential-entertainment complex on 132 and 133.

About a year later, the company bought the land from the Atlantic City Housing Authority and Urban Redevelopment Agency for $1 million.

Plans for a movie theater and a roller-skating rink have been put on ice.

But the core of the project — a $70 million millennial enclave, with 250 sleek apartments, geometric in motif, wrapped around a pool-studded courtyard,— could break ground at Block 132 this year.

Dubbed The Beach at South Inlet, proponents pitch it as a catalyst to drive development in the surrounding neighborhood — the keystone on which the South Inlet’s larger revitalization depends.

For three years, the CRDA has been acquiring South Inlet properties, about 2 acres, near Blocks 132 and 133 through condemnation and outright purchases.

That slog is nearing its end; a request for proposals inviting developers to submit plans for the land is expected to be released within a month.

“We’ve been through the most difficult part,” said CRDA Executive Director John Palmieri. “The South Inlet’s time has come.”

Like Boraie, Palmieri casts The Beach as the propellant for ancillary projects — “the flagship for new development within the South Inlet.”

And like Boraie, he’s emphatic that there’s pent-up demand for market-rate rental housing in Atlantic City, which hasn’t seen such a project in more than two decades.

Blocks 132 and 133 are, “in a way, the one development site that can help the city and us to make a statement, because it’s large enough,” he says.

* * *

The city is on board.

It amended architectural specifications so the project could get zoning approval. It said the developer could forgo paying property taxes on the apartment complex and instead make more-predictable payments in lieu of taxes. And it issued a Resolution of Need formally supporting the company’s plan to set aside 50 units at The Beach as “affordable housing” to be rented at government-controlled rates — a crucial document that helped the developer secure approximately $35 million in loans from the state Housing and Mortgage Finance Agency.

“We’ve underwritten it. We believe that it will work,” said Anthony Marchetta, Executive Director of the agency, which promotes affordable housing by, among things, financing projects with tax-exempt bonds.

The Beach also was approved for about $10 million in Hurricane Sandy recovery funds and for Low-Income Housing Tax Credits worth about $5 million.

Marchetta acknowledges that the agency’s decision to invest heavily in Atlantic City — in the South Inlet, no less — defies the prevailing narrative of the area as a hapless money pit.

But, he said, there’s a ready source of Atlantic City workers — at AtlantiCare, for example — who want to rent here but face an acute dearth of options. That makes for a ripe market, “and we’re putting our money in,” he said.

* * *

The CRDA, too, offered money. Last March the board agreed to loan up to $30 million for the project.

Then the sky started falling on Atlantic City.

The long-festering wound of sliding casino revenue, inflicted by competing mid-Atlantic casinos, went septic. Atlantic City lost three of 11 casinos between Aug. 31 and Sept. 16. More than 5,000 people lost jobs, and the city government was hurtled to the brink of bankruptcy, where it remains.

Now, CRDA board members are reconsidering their offer, which expires Sept. 30.

In a resolution in May, they said the deal can’t close until they decide, in a vote, whether “the project remains feasible and reasonable to fund in light of the changed economic conditions.”

“Projects of this magnitude have to be studied with a fresh set of eyes in light of all the changes in the market,” said CRDA board member and Resorts Casino Hotel CEO Mark Giannantonio.

Compounding matters is a bill, passed by the Legislature and awaiting the signature of Gov. Chris Christie, that would redirect CRDA’s development funds — the 1.25 percent Investment Alternative Tax on casino revenue — to pay down Atlantic City’s debt rather than fund new construction.

Palmieri said CRDA officials are preparing an internal report on the project's prospects for board members to review before they vote.

“The board is well aware that they need to take action before the end of September.”

Contact: 609-272-7239


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