Atlantic City’s version of a Reading Terminal Marketplace might not bear the Caesars Entertainment name, but the corporation’s influence is evident throughout the project.
Despite the fact that the Casino Reinvestment Development Authority has said five locations are being considered for an outdoor marketplace, documents drafted months ago and approved Tuesday coinciding with a $9.5 million donation show that Caesars has the final say over the project’s location.
Market Ventures, a Maine-based firm being paid $100,000 to determine whether the marketplace could thrive in the city and determine its potential location, has been asked to first consider the viability of a site across from Bally’s Atlantic City, also owned by Caesars, giving the corporation an advantage in capturing foot traffic that could flow from the marketplace to the Boardwalk.
Documents obtained by The Press of Atlantic City through an Open Public Records Act request show months of negotiations between the parties ultimately giving Caesars control over the final location. The company has designed a layout for the proposed location, including several restaurants, produce stands and outdoor seating.
“You might argue, now you can’t consider the strengths of other sites as you do your analysis, and well, look, we made a deal. We cut a deal,” CRDA Executive Director John Palmieri said. “We believe it’s a compelling site. They’re not saying you have to put this in some God-forsaken location since we’re giving you the donation. We would never have accepted that.”
Barring any unforeseen obstacles, the CRDA has agreed to use a site bordered by Ohio, Indiana, Atlantic and Pacific avenues, primarily owned by Caesars, that will be conveyed to the CRDA. If that site isn’t used, the CRDA may pick another location, but the alternate site cannot be on or adjacent to any casino property not owned by Caesars. It also cannot be more than two blocks from the Boardwalk, according to terms agreed to by the CRDA board Tuesday. None of the other four sites proposed by the CRDA fit those guidelines.
Last year, the CRDA agreed to give Harrah’s Atlantic City $45 million to build a Las Vegas-style conference center at its Marina District property. As a condition of that award, the parties agreed that a $9.5 million contribution would be made by Showboat to the marketplace project. Caesars is the parent company of Harrah’s, Showboat and Bally’s. The CRDA then twice tabled actions to accept the donation, which became tied to site negotiations for the project.
Palmieri said there’s good reason for giving Caesars a say over the marketplace location: It was their idea.
A year ago, Caesars first floated the marketplace idea and the site location to the CRDA, with Borgata also involved in discussions, Palmieri said. But the idea lost focus and the CRDA later decided to pursue the idea independently, coming up with its own possible sites if Caesars was no longer interested. Talks of a CRDA contribution to the conference center and a related donation by Caesars to the marketplace renewed discussions about the site.
“You can’t separate the fact they’ve given us in good will a donation and said, ‘Listen, we’d like you to use the site that we all agree made a lot of sense a year ago,’” Palmieri said.
Yet emails between the parties obtained through OPRA requests show the the tone, at times, was far less cordial. Over time, Caesars secured the right to take back its property if construction doesn’t commence within 36 months. The company also placed stricter restrictions on alternate locations.
“(My clients) do not like many of the conditions that we are adding to the letter but are prepared to accept them on their belief that the assemblage that they are getting will in all probability work for the marketplace project,” CRDA attorney Craig Domalewski wrote to Caesars attorneys Jan. 21. “It trumps everything else in the agreement. They get land and cash, and they get to pursue a project that they like and your client supports.”
Caesars did not respond to multiple requests for comment.
Market Ventures, run by veteran market expert Ted Spitzer, has two months to complete its analysis of the project. Despite the CRDA’s previous statements that the analysis will help determine the market’s location, Palmieri insisted that the feasibility study is still necessary to ensure there are no unforeseen problems with the site, including title and environmental issues.
With an aggressive timetable, Palmieri said construction could start within eight months.
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