ATLANTIC CITY — Twenty years ago, casino mogul Steve Wynn bolted from the resort after getting fed up with the state’s regulations.
Could Revel owner Glenn Straub be next?
He has threatened he might be, claiming regulators are preventing development and investment in the financially strapped city.
Developers coming into the city face an alphabet soup of regulatory agencies they have to deal with, from the state Division of Gaming Enforcement to the Casino Reinvestment Development Authority. Add that to one of the worst business-tax climates in the country, and one can see why the state has developed a bad business reputation.
Earlier this month, Straub, the 70-year-old Florida businessman, launched a scathing attack on the CRDA’s land-use procedures for holding up the reopening of the more than 6 million-square-foot Revel. Straub said he would abandon the project if things didn’t get better.
“Glenn Straub is used to doing projects in Florida. It’s easier and less expensive than here,” said Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College.
While Straub has been unable to get the former megaresort reopened, Bart Blatstein has been able to navigate his way through the state’s permitting process to reopen the neighboring Showboat in July as a hotel without casino gaming.
“I’ve been a developer for the last 40 years and this is the first time that I have done business outside of Philadelphia and the experience couldn’t have been better,” said Blatstein, who also took over the former Pier Shops at Caesars and turned the property into The Playground retail-and-entertainment complex. “We rebuilt 100,000 square feet at the pier over a 10-week period, and everyone was very supportive.”
In most municipalities, developers have to go through one agency for their approvals and inspections, while in Atlantic City there are two layers of bureaucracy to deal with for nongaming properties. Casino gaming adds another layer of oversight in the form of the state Division of Gaming Enforcement.
The CRDA handles approvals for redevelopment projects in the city’s Tourism District, while the city performs the inspections. The CRDA was given control of the Tourism District in 2011, when the state increased the authority’s power. The district includes the entire Boardwalk, the Marina District, Gardner’s Basin and 10 roads that lead into the district, including several on the city’s northern end.
“The one thing with the changes was it added an additional layer and made it a little more complicated,” Perniciaro said.
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City Planning Director Elizabeth Terenik said having two agencies involved can lead to confusion.
“It’s fractured in a way,” Terenik said. “We are always trying to make the process friendlier.”
Straub claimed Revel was ready to open June 15, despite the company lacking several key permits.
“I can’t believe how much bureaucracy there is in this state,” Straub said. “This is exactly what New Jersey is known for. This is just one more example of New Jersey’s anti-business attitude. This type of behavior is keeping others away.”
Straub’s application is again scheduled to be reviewed by the authority Tuesday.
In addition to taking issue with the lack of support from the CRDA, Straub said the DGE is holding up the reopening of gaming operations at the site. State gaming officials have told Straub he is required to apply for a gaming license to operate a casino on the property. Straub claims that since he is leasing the casino area out to a third-party vendor, he should not be required to apply for the license. Straub plans to lease out both the hotel and casino operations to separate vendors.
Despite Straub’s claim, Robert Ambrose, an instructor at the Center for Hospitality and Sport Management at Drexel University, feels casino regulations have become more consolidated over the years.
“Some may disagree, but I think here in New Jersey, at least on the casino side, regulations have become more manageable and streamlined, offering a more direct line of communication as opposed to years back. I think that is reflective of the maturing of the market itself,” Ambrose said.
Straub, like other developers, is required to meet the requirements for doing business in the Tourism District, said Paul Weiss, the CRDA’s chief legal officer.
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“The CRDA land use department has a legal responsibility to ensure that the law is followed,” Weiss said in a statement. “All applicants must meet those legal requirements.”