Caesars Entertainment announced plans Tuesday to construct a $134 million Las Vegas-style conference center at its Harrah’s property.
While some officials called the project a game-changer for the Atlantic City, plans for the conference center were met with vocal skepticism by others who questioned whether the resort can sustain both the Harrah’s venture and the Atlantic City Convention Center.
If approved, the new addition, modeled after the grandiose style of Caesars Palace in Las Vegas, would total 100,000 square feet over two floors. Featuring large glass windows overlooking the bay, the center would be built on the southwest side of the property opening into Harrah’s popular nightclub, The Pool, and its Red Door Spa, Caesars’ Eastern Division President Don Marrandino said.
Caesars officials stressed that while the Convention Center caters to trade shows and exhibitions, the Harrah’s facility would focus on business conferences. The Convention Center, which opened in 1997, was the most expensive project ever undertaken in the city with double the budget of the Harrah’s proposal.
“The most important thing we need is something to drive midweek business. We don’t have anything near what this will be. We’re not looking for trade shows and things like that. This would be a business center,” Marrandino said in a phone interview Tuesday night. “There’s not a better designed convention center in the Northeast.”
Plans for the project, which could break ground in January and open by July 2014, were announced at a Casino Reinvestment Development Authority meeting. Caesars is looking to the authority to provide $45 million, or one-third of the funding for the project. Caesars would provide the remaining $89 million, $55 million of which would come in the form of a private loan.
The project would generate about 340 construction jobs and between 60 and 140 permanent jobs. The facility would be able to handle small concerts of as many as 4,000 people, banquets of 2,500 to 3,000 and various-sized business conferences. The two floors would convert to 58 configurations of meeting spaces, Caesars officials said.
However, not all are convinced that the city is big enough for two large-scale meeting facilities.
“Absolutely, it’s a game-changer. My question is … is it a game-changer for the better or not?” Trump Entertainment Resorts CEO Robert Griffin said. “You said this doesn’t exist here today. I beg to differ with you on that. I think just the opposite.”
CRDA board member Edward Gant said he’s concerned that the Harrah’s project appears similar to what the city already has and noted he will not support the project if it would cause any harm to the existing facility.
“It sure looks like a convention center,” Gant said.
The CRDA is requiring that a market analysis be completed to determine what kind of effect the facility would have on the existing facility. That study will be paid for by Caesars, but CRDA will select the consultant.
Two firms have provided proposals. One will be selected shortly and given 30 days to complete the study, CRDA Executive Director John Palmieri said.
Marrandino said he was surprised by the number of questions that arose at Tuesday’s CRDA meeting. The board often sees presentations and discussion, but public disagreements are rare.
“I was disappointed to hear their objections, particularly because I’ve been supportive of anything that could be done in the city to help their properties,” Marrandino said.
Caesars’ presentation to the CRDA included a statement of support from Jeffrey Vasser, president of the Atlantic City Convention & Visitors Authority, which operates the Convention Center. However, officials said they would like to hear more from Vasser directly. He could not be reached late Tuesday.
The Governor’s Advisory Commission on New Jersey Gaming, Sports and Entertainment in 2010 named increasing convention business by 30 percent a year for the next five years as one of its eight goals for the city. The Harrah’s center would help the state achieve that goal, Caesars officials said.
The proposal for the Harrah’s property comes six months after $2.4 billion megaresort Revel opened its doors. To date, it has not met the high expectations predicted for the casino hotel.
Revel took in just $16.9 million in gambling revenue in September, and $20 million in August. Since it’s opening in April, Revel has consistently ranked eighth among the city’s 12 casinos in gambling revenue.
Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Richard Stockton College, said despite Revel’s performance, the fact that more investment is coming into Atlantic City is not surprising. He referenced recent plans for a Margaritaville expansion project to Resorts Casino Hotel, as well as plans for a Bass Pro Shops at The Walk outlets.
“In a city like Atlantic City, within a relatively short drive of 30 (million) or 40 million people, it’s hard to believe that a single convention center could handle all of the demand for space,” Posner said. “Atlantic City is a sprawling destination resort. I can see the benefit of having multiple spaces catering to different groups.”
Despite Griffin’s questions, he said he doesn’t oppose the conference center. But he said the project has raised major concerns among other casino owners over what types of projects the CRDA is able to fund. Griffin, who also is president of the Casino Association of New Jersey, said the Caesars project was discussed at an association meeting last week and generated concern from several other casinos.
“This really is a city of have and have-nots. … Not everybody has equity to put in,” Griffin said. “I think the biggest issue is what are the rules of the road for the casinos going forward? How are we going to determine what projects are approved for which amounts. Until we have rules of the road for all of the casinos, we think it wouldn’t be wise to move forward.”
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