A conversation with Casino Reinvestment Development Authority executive director, John Palmieri, of the Inlet section of Atlantic City, marking the conclusion of his first year. Thursday, September, 13, 2012, 2012 ( Press of Atlantic City/ Danny Drake)

Danny Drake

John Palmieri, 61, took over as executive director of the Casino Reinvestment Development Authority one year ago — just months after the state agency took control of planning and development in the Atlantic City Tourism District. The Hoboken, Hudson County, native said he wanted to return to New Jersey because he saw the city’s challenges, as well as opportunities to overcome them.

Q: You’ve been the head of the CRDA for a year now. What do you consider to be the agency’s most significant advancements of the past year, and why?

A: I must say the approval of the master plan. When I came here last October, just under a year ago, the authority had been given a direction by statute to have a master plan prepared by February of 2012. We worked very quickly to consult with the neighborhood and the business community and the elected leaders of this city to prepare the plan. We had a very aggressive schedule … but we were required by law to get it done. We did a terrific job.

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Q: How closely do you plan to stick to what is laid out in the master plan?

A: It is a plan, and plans are supposed to provide guidance. This document most certainly will. We focused on the important things that we were going to be doing right away. The plan identifies mid-term and longer-term opportunities — as a good plan should. We’re looking at 10 years or more. One of the things we agreed we needed to do with kind of an aggressive point of view was identify the short-term initiatives.

Gov. Christie very clearly, when he and I met, talked about the importance of moving toward what we could do in this city pretty quickly. We don’t have a whole lot of time. I’ve said this to your paper and to other outlets. We have a small window, in my judgment. We wanted to get a plan put into place that talks about what we can do over time, but with an eye toward the things that we needed to do right away.

Q. What do you consider to be the biggest obstacle the city faces moving forward?

A. The economy. Obviously, the casinos have been dealing with the competitive environment. Apart from the general economy, there’s a lot more competition, and that affects casino receipts. We have to come to terms with that. Although our principal focus is on the nongaming element of the economy, we certainly appreciate and recognize how important the casino licensees are to employment and tax-base creation for the city. But the economy is the biggest issue.

We’ll succeed to the extent that Resorts, for instance, does a Margaritaville or Cordish presents a Bass (Pro Shops) outlet — two terrific destination tenants. By any measure, these are nationally prominent tenants that are going to bring hundreds of thousands of new visitors to the city and help to grow the economy through that nongaming element. But we need more activity like that.

We talk to developers. There are property owners in the South Inlet. We’ve talked to a few of the larger casinos about interests they have in doing larger nongaming development investment activities. I’d like to think we’ll have a few new projects we’ll be able to present. We’re talking to (The Richard Stockton College of New Jersey) of course, the major local public institution. We think there may be several opportunities for additional investment, but we can’t do it alone.

Q. This year is on track to be the deadliest year Atlantic City has seen in five years. Most of the homicides have occurred outside the Tourism District, but in one incident two tourists were stabbed within the district’s limits. Do you really believe the city is safer now with the Tourism District in place?

A. Any time there’s a violent crime, it hurts the city’s reputation and it affects visitation. We live in an urban area. We’ve got to deal with the hard realities associated with these kinds of events happening occasionally. ... I know that can be disturbing. But I think it’s got to be understood in context. For instance, we entertain upward of 28 million to 29 million visitors a year. So beyond the limits of the city’s population, which is 40,000 plus or minus, millions of people come here every year. We behave like a much bigger place than you would imagine. With that, sometimes, comes crime.

We’re doing our best, obviously, to address issues that create a better environment, a better, more hospitable environment for visitors. We are achieving success. (Tourism District Commander) Tom Gilbert ... has been assigned from the Attorney General’s office to the district full time. We, through Tom’s office, have pledged over $3 million to help support technology upgrades for the Police Department, and we’re beginning with a 411 system that encourages people to report crimes anonymously to us. We’ve got 25 dedicated Class II police officers to the district. We’ve got the ambassadors. Certainly, that number has been enhanced dramatically. So I think we’re in a much better place. We’ve got to keep working at it. There isn’t any question that more needs to be done.

Q. You’ve spoken in the past about the importance of not allowing Atlantic City to become a hub for the region’s homeless and the impact that could have on the Tourism District. What impact do you think the Atlantic City Rescue Mission has on the CRDA’s revitalization efforts?

A. Certainly, in the short-term we’ve got to deal with making the shelter more effective and managing those individuals who need service. We understand that, over time, relocating the shelter would probably be an appropriate thing to do — just outside the limits of the Tourism District. That’s not because we don’t understand that there are people that need help.

For now we need to focus on how to make (the shelter) operate more effectively. That might mean, for instance, not accepting every homeless person who comes to the doors of the shelter if they can’t be accommodated. You can’t allow people to just walk in and be taken care of. You want to do a better job. ... We don’t want to be a catch-all for every poor soul who needs service in the state of New Jersey. That isn’t what Atlantic City should be.

Our goal is to make sure we do sweeps on the Boardwalk within the precinct and below the Boardwalk. We do sweeps. Police get involved. Ambassadors are involved. Then, we want to, of course, provide them access to service, whether social service or medical service, and provide them with arrangements to relocate to other places. The places where they came from, for instance, would be a good first step in our judgment.

Q. There have been a number of media reports questioning Revel’s performance. In August, Revel broke the $20 million mark in casino revenue but still ranked eighth among the 12 casinos. Are you concerned about its performance?

A. I think Kevin DeSanctis would admit that he was hoping to do better. There is something to be said about the fact that they’re a new operation. They’ve created a new program for entertainment beyond gaming. Obviously, they want to become a place, a resort, that creates opportunities for a number of things beyond gaming. It’s a new model in a way. They’re a new operation. I think they need a bit more time.

But I also know — I stated there’s a lot of competition. Its not lost on Kevin DeSanctis. The casinos in the city certainly understand that this represents competition. Whether or not he is viewed — Kevin, that is, and Revel — as a casino that might cut into existing profits and not grow the pie is an open question, I think. I’d make the argument that they’re brand new. The beach hasn’t fully opened. They haven’t identified all the tenants for the various locations within the campus, and they need a little bit of time.

Q. The South Inlet redevelopment project, which will bring new housing, shops and restaurants to the neighborhood that surrounds Revel, relies in part on an investment from Revel. What happens to that project if the financing doesn’t materialize?

A. We are relying on Revel to create an income stream that will allow us to either borrow or bond debt up to $50 million in the first phase, and that may grow to a few hundred million over time. We’ve begun by identifying a gamut of improvements that we’ll be able to execute with $50 million based on receipts that can be forecast over the next 20 years. We used pretty conservative judgments. We’ve been working with the (state) Economic Development Authority. They’ve been representing our interests in negotiating with the banks to allow us to borrow money so that we can begin that first phase, which will allow us to create a park next to the lighthouse, to acquire some of the blighted properties that exist, and assemble some new parcels for development.

Stockton has expressed interest (in the project). There have been a few developers who own parcels who have come to us and said, “Listen, we think we want to do a residential building or some retail.” But I would be less than forthright if I were to suggest that the funding is in hand. We’re still working with EDA to do that. They’re relying on assumptions of revenue that Revel generates. But I am optimistic that we’ll be able to do that quickly.

Q. A number of the renters who will be relocated by the South Inlet project recently spoke out against the plan at a meeting organized by the local NAACP chapter and other groups. Mayor Lorenzo Langford has spoken at CRDA meetings in the past about a plan that would ensure other housing is created in the city. Where does that stand?

A. We talked to the mayor about identifying other sites for development that would accommodate residential development. We have agreed in principal. We haven’t yet signed a letter of agreement, but we have discussed a few locations (for) swapping property that the city owns and providing the city with some property that might be suitable for that type of residential development. I’m confident that we’re going to be able to satisfy the city and provide (that). The mayor and I have had positive discussions.

Whether or not we do any new development in housing — whether the mayor does it, or we do it, or the Housing Authority does it — we will ensure that every displaced tenant finds suitable — I’d say improved — residential quarters within the city’s limits. There are enough housing units presently within this city of Atlantic City to satisfy any relocating family.

Q. In Providence you were credited with developing a thriving arts district. Here, we’ve seen Dante Hall reopen this year, plans for the Noyes Museum of Art to occupy the first floor of The Wave parking garage, and plans for several large-scale art installations. Do you think Atlantic City could really be known for a strong arts presence? What has to happen next to create a thriving arts district in Atlantic City?

A. Providence had the advantage of hosting several colleges, including the Rhode Island School of Design, which is the premier arts school in the country. Providence has always had kind of an advantage. (Atlantic City’s plans are) kind of fledgling, I’d say. We’re preparing contracts right now with Stockton to have them occupy about 15,000 (square) feet of space right across from Dante Hall within the garage building, The Wave. We have about 10 retail spaces that we would have probably just had market retailers occupy. We have been successful in negotiating terms with Stockton to occupy that space. Noyes would be the anchor tenant, which is terrific.

People have talked to us about the challenges (of creating an arts district). We’re not in the middle of a big arts scene. We’re an hour from Philly. We need to grow, and I think we’ll go through a little bit of a gestation period. We’re beginning by making an investment, which is always important. We’re going to be spending $2 million on building out this space for Stockton arts uses. So, not only are we providing at a deep discount on these rental units, but we’re going to do the fit-out for Stockton with the understanding — it will be explicit — that they bring Noyes and do these other arts uses. I think that will create a little bit of energy behind a new use.

Q. Bader Field hosted two successful festivals this year, but the last two were canceled, due in part to the luxury tax. The city-owned venue falls within the boundaries of the Tourism District. How would you like to see that space used in the future?

A. In the short-term I think that kind of use is appropriate. It is proven to be accessible and well-managed. The police have done a good job, and the city has done a good job. There is a tax issue, but I haven’t been privy to (that). ... I’m not sure whether or not we’ve got a real hurdle in the tax structure that exists in the luxury tax. It’s a great location. It’s 100-plus acres. It’s close to the (Atlantic City) Expressway. I think it also does things that maybe you can’t quite measure. It promotes the city as place for this kind of cool activity.

We want to continue to do what we can to support those activities. It may be working with the Atlantic City Alliance to provide some financial support to make those kinds of programs work. ... That a few people had trouble because they believe the tax is too high, I’m not sure is a statement that I would take as gospel, that that’s a hurdle to getting groups to come. I think we still can do a good job there.

Q. What is on the top of your to-do list for your second year at the CRDA?

A. It’s continuing to work with the private sector. In the final analysis, we need the private sector to invest in the city. We can do the public work. We can work with the city to do capital improvements. ... As a public agency, we can make a difference. But in the final analysis, we need the private sector to say, “Listen, we think there are some terrific things happening.” We’ve got the ocean as a tremendous asset. We’re doing things to improve safety and the appearance of the city. We’ve got Margaritaville and Bass (Pro Shops), and maybe a big casino development activity that will be announced.

It’s building on the strengths, and getting the private sector to come and meet with us because we’re here to help fill in the gap. I think that’s one of the things redevelopment authorities do — identifying what the developer wants done, what he can afford to do, what the gap is, and trying to fill the gap. That’s the role. I would say, looking into the next year, I’d like a couple of more projects to present themselves and for us to be helpful in making them feasible.

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