Construction has started at Harrah’s Resort on a nearly $126 million conference center that is billed as the largest of its type in the Northeast and could serve as a magnet for corporate business in Atlantic City.
Caesars Entertainment Corp., parent company of the Harrah’s casino, made a surprise announcement Wednesday that work is underway on the conference facility. A formal groundbreaking ceremony, usually a staple of major construction projects, was not held. No completion date was announced.
Caesars said the conference center will stimulate major corporate business for Atlantic City, particularly during the traditionally slower midweek periods. Lt. Gov. Kim Guadagno also noted the project is a key part of efforts to broaden Atlantic City’s appeal as a tourist destination.
“This is an important step toward the revitalization of Atlantic City, and will help create jobs and attract more visitors to New Jersey,” Guadagno said in a statement.
Overall, Atlantic City captures less than 1 percent of the $16 billion conventions and meetings market in the Northeast, according to Caesars. By having the biggest conference center in the Northeast, Atlantic City will now be able to tap the feeder markets of New York and Philadelphia, Caesars said.
“The development of this facility is a significant milestone in our efforts to collaborate with the state to reinvigorate Atlantic City and attract new segments of visitation to the market,” Gary Loveman, chairman and CEO of Caesars Entertainment, said in a statement.
Altogether, the project will include 250,000 square feet of space. The facility is designed to host corporate meetings that will complement the conventions and tradeshows at the Atlantic City Convention Center, Caesars said. There will also be two ballrooms, each featuring 50,000 square feet of space.
The project, shadowed by delays while Caesars sought to line up private financing, is backed by $45 million in public funding from the state Casino Reinvestment Development Authority. Caesars said it plans to contribute more than $80 million of equity to complete the center.
Originally, the price tag was announced at $134 million, but Caesars said in a statement Wednesday that the cost will be $125.8 million. Caesars spokesman Jerry Eisenband did not immediately return calls seeking comment about the cost discrepancy.
The CRDA approved its funding for the conference center in November 2012, with officials saying the financing was cleared quickly because of Harrah’s aggressive plan to break ground by January 2013. While the CRDA’s $45 million commitment — the largest ever approved for a single casino-led project — was passed unanimously, the board expressed concern from the start that outside loans had yet to be secured.
CRDA Executive Director John Palmieri later said he was frustrated by the slow pace of the project, given the state’s swift commitment to provide monetary support. However, Palmieri sounded much more conciliatory in a statement Wednesday.
“The Harrah’s conference center will attract corporate events and create new reasons to come to Atlantic City,” Palmieri said. “Nongaming economic impacts mean job and tax growth. The Harrah’s project will reinforce Atlantic City’s reputation as a visitation and meeting center.”
In his statement, Loveman praised the CRDA, Gov. Chris Christie and the New Jersey Legislature for the state’s support of Atlantic City and for the conference center.
“We appreciate the leadership of Gov. Christie and the state Legislature in laying the foundation for revitalization of Atlantic City and investing in its future,” he said. “The support of the New Jersey Casino Reinvestment Development Authority for this project is instrumental to its success, and we look forward to continuing to pursue ways to attract new visitors to Atlantic City.”
Another state agency, the New Jersey Economic Development Authority, has approved $24.1 million in state tax breaks for the conference facility over 20 years. That money will come from the same state program that provided the Revel Casino-Hotel with $261.4 million in state tax credits over 20 years.
Staff Writer Jennifer Bogdan contributed to this report.
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