ATLANTIC CITY — The state agency designed to help revitalize Atlantic City through the reinvestment of casino profits has spent nearly $360 million on development outside the gaming resort since its inception in 1984.
That represents 19 percent of the total funding provided by the Casino Reinvestment Development Authority. Such investment dollars could be restricted to Atlantic City’s borders under Gov. Chris Christie’s new plan for Atlantic City’s future.
“The northern part of the state has benefited, I think at times disproportionately, from CRDA money that was generated here,” Christie said during his speech in Atlantic City last month. “It’s time to both acknowledge and confront changed circumstances. And while sharing CRDA money around the state may have been a good idea 25 years ago, it’s not a good idea any more.”
Northern New Jersey has received more than $195 million from the CRDA for a variety of projects that have no relation or effect on Atlantic City, including $1.33 million to the Yogi Berra Museum at Montclair State University and $2 million for the construction of a dormitory at Caldwell College, both in Essex County.
Meanwhile, southern New Jersey towns other than Atlantic City have received more than $163.5 million from the CRDA, from Atlantic County to Camden County, including $16.5 million for an ice rink and convention center in Pennsauken. More than $1.5 billion has been distributed in Atlantic City itself for a variety of projects.
“I didn’t think it was that high,” Assemblyman John Amodeo, R-Atlantic, said of the total spent outside Atlantic City. “I thought at the most it was $60 million or $80 million.”
Amodeo called on the Governor’s Office last week to restrict new applications for CRDA funding out of concern that non-Atlantic City interests would try to pry as much money as possible from the authority before Christie’s potential changes are enacted.
But to northern New Jersey interests, losing the money would be another unfair blow by Christie in a proposal that is already costing that region dearly with its potential sale or closing of the Meadowlands Racetrack.
“I think we’ve always maintained that Atlantic City is an important part of our state’s economy, and we need to provide them with as many measures as possible to succeed,” said state Sen. Paul Sarlo, D-Bergen, Essex, Passaic. “But if we’re going to do that as a state, at the expense of other regions — you know, this region is part of his proposal, too. All we’re asking for is our fair share back.”
Locals fight for funding
Northern New Jersey Democrats are not alone in their concern. Southern New Jersey politicians worry that the governor’s proposal for the CRDA, while philosophically on point, could ultimately become too limited, particularly concerning funding for areas within southern New Jersey.
“Let’s not stand on formality here that every cent should be spent in Atlantic City,” said Dennis Levinson, Atlantic County’s Republican executive. “If a project (outside Atlantic City) can show benefit for Atlantic City and Atlantic City’s citizens, this unequiovocally should be considered.”
One project that Levinson insists should remain connected to the CRDA and its funding is the NextGen Aviation Research and Technology Park, a $300 million research operation planned for Egg Harbor Township. The park is expected to receive $4 million from the CRDA.
“This industry (aviation research) doesn’t take away from Atlantic City and its tourism economy, it supplements it,” said Gordon Dahl, executive director of the South Jersey Economic Development District. “If you have a portfolio of stocks, you don’t load it all up in one stock. You spread out your investments.”
Atlantic City projects the CRDA has funded include about $125 million to transform the city’s northeastern tip from slum to neighborhood and the recent awarding of an $18.3 million contract to widen the narrow and deteriorated roads leading to the the unfinished Revel Entertainment Group casino project in the South Inlet section.
But even the funds spent in Atlantic City have been criticized by some who contend that too much of the money went back to the casinos for construction and entertainment projects, rather than revitalizing more areas such as was done in the Northeast Inlet.
“If we didn’t have the tunnel and the convention center, you would really have a predicament with the future of Atlantic City,” said Republican former state Sen. Bill Gormley. “It was necessary to do these major infrastructure goals, or you would not be positioned as a community that’s more than a slot parlor.”
The Casino Control Act, the legislation that legalized Atlantic City gaming in 1977, required each casino to reinvest 2.5 percent of its gross gaming revenue. However, more than six years later, no gambling operator had acted on the requirement. The industry’s complacency prompted the state Legislature to establish the CRDA and regulate its reinvestment and collect 1.25 percent of the casinos’ annual revenue.
Money to A.C. slows
Christie’s proposal comes at a time when Atlantic City is seeing the least amount of casino reinvestment in its history.
The CRDA’s funding formula is currently structured to provide less funding to Atlantic City as each casino gets older. Atlantic City receives 100 percent of a casino’s CRDA dollars during its first three years of operation. After that, the ratio drops and southern New Jersey and northern New Jersey begin to pick up a share.
After a casino’s 20th year of operation, Atlantic City would receive 20 percent of the disbursement, southern New Jersey would get 45 percent and northern New Jersey would get 35 percent. After 35 years of operation, a casino would no longer be required to reinvest any money in Atlantic City, instead splitting its share evenly between southern New Jersey and northern New Jersey for the remaining 15 years of its obligation.
Five of the city’s 11 casinos — Harrah’s Resort, Caesars Atlantic City, Bally’s Atlantic City, Resorts Atlantic City and the Atlantic City Hilton Casino Resort — will surpass their 35th year of operation in less than six years, shutting off their required reinvestment in Atlantic City.
James Kehoe, chairman of the Casino Reinvestment Development Authority, spoke positively about limiting CRDA spending to Atlantic City but did not fully endorse the idea, saying things could change as the proposal is fleshed out.
“I think that would be a bonus for Atlantic City if that money can all stay there,” said Kehoe, of Collingswood, Camden County. “But just like anything else, once you get to the final plan, it looks a little bit different.”
Christie’s overall plan for Atlantic City, guided by a report from his Advisory Commission on New Jersey Gaming, Sports and Entertainment, also included hints that the governor has a lack of confidence in the CRDA.
The report suggests the proposed Atlantic City Tourism District, headed by representatives of the state, city and casino industry, absorb “certain governmental functions” now managed by the CRDA. The recommendation does not detail what those functions are, nor how the plan would be implemented.
Kehoe did not get much more detail when he met with Christie at the governor’s mansion last week along with other legislators and city stakeholders. He described the visit as a listening session for Christie that amounted to productive conversation.
Kehoe ran through a list of the duties that he would not want to see stripped from the authority.
“I think we do a good job of eminent domain and taking down buildings,” he said. “I think we do a good job of creating and reinventing infrastructure, assisting the Jitney Association and maintaining quality redevelopment efforts.”
Asked what would be left for the new district to take over, Kehoe took a long pause and said, “I don’t know.”
The details of what is to come from Christie’s proposal will likely be mired in the grueling legislative process for months. But some believe that letting the CRDA fund the development of the new Tourism District is instrumental to his overall plan and an immovable piece.
“I’ve seen the Christie who arrives at 90 percent of what he’s shooting for,” Gormley said. “There could be some spending outside, but I think he’s serious about this.”
Staff writers Donald Wittkowski and Juliet Fletcher contributed to this report.
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