Boardwalk Hall, Atlantic City’s largest concert and sports arena, is plagued by high labor costs and a tedious process for rigging the sound and lighting systems needed for major shows.

Casino executives and show promoters complain that exorbitant costs put Boardwalk Hall at a competitive disadvantage with arenas in other cities — a huge detriment at a time when Atlantic City is trying to claw its way out of a six-year economic slump by offering its customers big-name entertainment.

An agreement brokered in 2001 to ensure “labor peace” created costly overlaps among the electrician and stagehand unions that share most of the work at Boardwalk Hall, operators say.

For the electricians, it allows them to do concert set-up work in Atlantic City they normally don’t perform at arenas in Newark and Philadelphia, explained Greg Tesone, Boardwalk Hall’s general manager.

The Press of Atlantic City obtained the union pay scales at Boardwalk Hall through a New Jersey Open Public Records Act request. Figures show that electricians are paid $98.40 per hour and $144.51 for overtime. A foreman electrician earns $131.85 per hour and $197.78 for overtime.

Pay varies for members of the stagehands union. The “hands,” a term for general workers, earn $37.56 per hour and $56.34 for overtime. The riggers, the stagehands who hang steel cables to support the building’s light and sound systems, are paid $44.52 per hour and $66.78 for overtime. Department heads for the stagehands earn $41.26 per hour and $61.89 for overtime.

Global Spectrum, a subsidiary of Comcast-Spectacor, is preparing to replace SMG as Boardwalk Hall’s operator under a new five-year contract starting later this year. SMG, however, has filed a lawsuit to block the management switch, claiming that the process for selecting Global Spectrum was flawed.

Tony Rodio, chief executive officer of Tropicana Casino and Resort, said he understands that it is cheaper to produce shows in New York City than at Boardwalk Hall.

“We look for opportunities to book shows. But it’s very, very difficult to make it work profit-wise because of the costs,” said Rodio, who also serves as president of the Casino Association of New Jersey, a trade group representing the Atlantic City gambling industry.

Caesars Entertainment Corp., owner of the Bally’s, Caesars, Harrah’s Resort and Showboat casinos in Atlantic City, has threatened to pull out of the hall unless it becomes less expensive, Tesone said. Caesars Entertainment is the building’s largest casino user, staging headliner concerts and sporting events, including a charity game of National Hockey League all-stars on Nov. 24 that raised $500,000 for Hurricane Sandy relief efforts.

Don Marrandino, Eastern Division president of Caesars Entertainment, stressed that the cost structure must be lowered if Atlantic City wants to continue providing an ambitious entertainment lineup.

“There is no question that if the costs to execute events at Boardwalk Hall were more closely aligned with the rest of the entertainment industry, we would be more successful at bringing more events to the city,” Marrandino said.

In January 2012, the Miss’d America Pageant threatened to move its annual show out of Boardwalk Hall because of high production costs. Miss’d America is a drag-queen spoof of the Miss America Pageant, which was held in Atlantic City for 84 years before leaving in 2005.

“The labor costs really did affect our budget, particularly with overtime costs. That’s what really hurt, no question about it,” said Gary Hill, a co-founder and executive producer of Miss’d America.

Hill estimated that $15,000 to $16,000 in overtime costs at Boardwalk Hall left little for Miss’d America’s charitable contributions in 2012 to such groups as the South Jersey AIDS Alliance.

Frank Gelb, of Gelb Entertainers Inc. in Ventnor, is a show promoter whose ties to Boardwalk Hall date back more than 40 years. He was using the hall for concerts, ice skating shows, boxing matches, wrestling and even roller derby prior to the advent of Atlantic City casino gambling in 1978. The 75-year-old recalls sitting in at meetings decades ago, when city officials brainstormed on ways to lower the building’s costs, but ultimately were unsuccessful.

“Historically, the Boardwalk Hall is much, much more expensive than many other buildings,” Gelb said. “They don’t have the latitude to adjust those costs. I have been told in over 40 years that it’s largely due to union costs.”

Boardwalk Hall’s operators have had only limited success in efforts to reduce labor costs. For decades, there have been complaints about the building’s onerous and expensive work rules.

The latest labor agreement was negotiated after Boardwalk Hall underwent a $90 million renovation in 2001 to transform the building from an old convention center into an entertainment venue. Prior to that, “a line was drawn on the floor” to designate the work zones for the electrician and stagehand unions, creating tension in the process, said Tesone, general manager of SMG.

“Now, we have stagehands and electricians doing the same work,” he said. “We wanted labor peace. That was the most important thing.”

Tesone maintained that the labor situation prior to the hall’s renovation was “a nightmare” and jurisdictional disputes and convoluted work rules made things even more difficult.

“Things are much better than before. Labor has come to the table,” said Jeffrey Vasser, president of the Atlantic City Convention & Visitor Authority. “But we have more work to do, especially now. There is more competition. Promoters have other options. They can go to Philadelphia or Newark. They can also do well in Atlantic City, but we have to make sure it’s worth their while.”

Representatives of Electricians Local 351 and Stagehands Local 77 did not return messages seeking comment.

One South Jersey labor leader, whose union represents 300 food-concession workers at Boardwalk Hall, criticized the electricians and stagehands for not doing enough to contain costs.

“I don’t understand why the unions who represent those workers won’t work with Boardwalk Hall to creatively get those costs under control,” said Bob McDevitt, president of Local 54 of UNITE-HERE. “The workers have to understand the need to give their employers some breathing room without going to the poor house.”

Vasser argued that the quality of union work remains high and that both the electricians and stagehands have collaborated with Boardwalk Hall’s operators in efforts to rein in costs.

Much of the high labor costs stem from the building’s “grid,” a scaffold-like metal structure suspended from the ceiling in front of the stage. At about 100 feet long and 60 feet deep, it is simply too small to handle all of the lighting and sound systems for major shows. As a result, work crews must climb high into the ceiling to run the steel cables that support the lights and sound equipment hanging over the rest of the hall’s sprawling floor.

At other concert halls, crews usually come in during the morning and have the lighting and sound systems ready for a concert that night. At Boardwalk Hall, an extra day is needed to hang the sound and lighting equipment before a concert is held, Tesone noted.

“An extra day of labor is required,” Tesone said. “I can’t do back-to-back shows.”

However, a new $3 million grid, 300 feet long, is expected to be installed by late May. It will hover over the entire floor and will make it easier, faster and less expensive to prepare the building for shows, Tesone said. The project was supposed to be completed by December, but has been pushed back until the spring because of extra time needed for the grid’s design and fabrication.

Atlantic City’s main competitors for concerts are the Wells Fargo Center in Philadelphia and the Prudential Center in Newark. Tesone said the Prudential Center does not use electricians for the same type of concert set-up work in Atlantic City. Tesone said he believes the Wells Fargo Center uses only a few electricians, or possibly none at all, for that kind of work.

Both the Wells Fargo Center and the Prudential Center are privately owned. Comcast-Spectacor, owner of the Wells Fargo Center, declined to disclose the building’s labor costs or discuss its operations.

Bob Sommer, president of Rock Entertainment Management, a Prudential Center holding company, also declined to reveal his building’s labor costs. Sommer, however, did say that the Prudential Center, the home of the NHL’s New Jersey Devils, takes far less time than Boardwalk Hall to set up for concerts and sporting events.

“Bruce Springsteen played at the Pru Center in May during a concert that went past midnight and the very next day we had a Devils playoff game,” Sommer said.

Gelb noted that Boardwalk Hall’s high costs recently hurt Atlantic City in competition with the Prudential Center for a concert by famed Italian tenor Andrea Bocelli. Gelb is promoting the Bocelli show.

“When Newark came in, they made a better offer for Bocelli,” Gelb said. “At other venues, they have ways to offset those costs to make it less expensive.”

Bocelli has performed at Boardwalk Hall in the past. The arena’s entertainment lineup through the years has featured some of the superstars of the music world — ranging from a Beatles concert in front of shrieking fans in 1964 to more recent shows by the Rolling Stones, Barbra Streisand, Paul McCartney, Elton John, Springsteen and Lady Gaga.

Built in 1929 for $15 million, the hall was originally called the Atlantic City Auditorium. Boasting 232,500 square feet of space, it was billed in those days as the biggest convention center in the world. At that time, it was also the largest structure built without roof posts or support pillars. Later, the building became known as Convention Hall.

The 2001 renovation project resulted in the name change to Boardwalk Hall and gave the building its new life as a sports and concerts venue. It has a seating capacity of 14,000 under an arched ceiling that soars 137 feet high.

Adding to Boardwalk Hall’s costs are the building’s age and operating requirements, Vasser said. There are many doors and entryways, requiring more security guards to watch over them. Also, the dated technology is not energy-efficient.

“We acknowledge that we’re an expensive building,” Vasser said. “Part of it is the fact that it’s a 1929 building. It’s not as efficient as a newer building.”

Despite its age and operating flaws, Boardwalk Hall has racked up a series of awards since 2001 for its renovation, historic preservation and entertainment. Among them, it was recognized by Billboard magazine in 2009 as the top-grossing, mid-sized arena in the world for a decade. Billboard also named it the top-grossing, mid-sized arena in North America in 2010. Venues Today, a trade publication that covers the business side of entertainment and sports, named Boardwalk Hall the “Top Stop for the Decade” from 2002 to 2012.

Vasser said promoters are still turning profits for their shows at Boardwalk Hall. In 2012, the arena hosted 15 concerts, compared to 16 in 2011.

“It still speaks well of the market,” Vasser said. “Even with our higher expenses, we’re still driving good business here. Promoters still know they can make money here.”

Contact Donald Wittkowski:

609-272-7258