The continuing threat of increased competition and the finite amount of available gambling dollars means now is the time to review existing casino regulations with an eye toward limiting expansion if Atlantic City is going to remain a viable market in the future.
That was the argument made by casino operators, gaming regulators and the Murphy administration to a state Senate committee last week about the need for a comprehensive review of the industry rules.
Now that the casino market has stabilized after a brutal 10-year stretch, some officials believe a thorough review — and possible legislative action — may be the best hope to prevent another calamity.
Jim Johnson, special counsel to Gov. Phil Murphy for the Atlantic City transition, submitted testimony to the Senate State Government, Wagering, Tourism and Historic Preservation Committee that read, in part: “It is often the case in times of market failure that regulatory and oversight authorities conduct a review to see how the failure could have been avoided and propose reforms that take into account changes in the regulated industry. ... Since the period of crisis (has) passed, we recommended that policy makers undertake a similar review.”
There has been no legislation introduced to reform existing casino regulations and the testimony was intended to bring attention to the need for review. But some legislators are already pushing back on the idea that limiting the free market could have unintended consequences and should be carefully examined.
“Instead of limiting the number of casinos, we should be encouraging new investment through competition while the state focuses on enforcing the Casino Control Act to hold the existing casinos accountable to live up to their obligations to our working families by creating decent paying jobs, fostering economic re-development, and supporting programs for seniors and the disabled,” state Sen. Chris Brown, R-Atlantic, said. Brown is a member of the Senate committee that heard testimony last week.
Johnson, David Rebuck, director of the state Division of Gaming Enforcement, and James Plousis, chairman of the Casino Control Commission, all testified about the need to preserve and protect Atlantic City’s casino industry. The Casino Association of New Jersey, a trade group that represents all nine of the city’s casino properties, also submitted testimony in favor of regulatory review.
Johnson co-authored the Murphy administration’s transition report on Atlantic City and recommended exploring the notion of either capping the number of casinos or limiting the total market capacity.
“To protect the strength of the (casino) industry, we recommended that Trenton policymakers take steps to ensure that the regulatory approach adapts to current market conditions and learns the lessons that the past may teach us,” Johnson wrote.
The industry has gone through several rounds of regulatory reform following the legalization of casino gaming in nearby markets, which resulted in a handful of major changes to the structure of gaming regulation in New Jersey.
Rebuck, in his written testimony, said previous reforms were successful in stabilizing the casino industry and contributed to its growth over the last several years. But, there are “limited avenues left to explore within the current statutory constraints,” he noted.
“Additional changes and reform would need to emulate from legislative action,” Rebuck wrote. “Determining the most effective actions needed to prepare for these future challenges requires further assessment, analysis, study and input from all stakeholders.”
The Atlantic City casino industry has made a concerted effort in recent years to diversify its noncasino offerings to attract more visitors and increase revenue. The idea of expanding nongaming amenities to entice people to casino properties is employed in Las Vegas, where the city’s 104 gambling parlors generate more revenue from food and beverage, entertainment, retail and special events than slots and table games.
The association said that casino operators in Atlantic City have invested “hundreds of millions of dollars on the evolution of the resort into an East Coast regional destination,” to lure both gamblers and noncasino visitors.
But, increased competition in nearby gaming jurisdictions — and the potential for inter-city expansion — means the Atlantic City casino industry needs to be carefully monitored, the group said.
“Unfortunately, the reality is that there is still a limited and finite interest in the gaming product itself as an attraction, which limited interest was historically not sufficient to support (12) casino properties,” the group wrote. “In fact, based on the Division’s recent financial reports, that limited interest marginally supports the market now with nine casinos.”
ATLANTIC CITY — Bob Weipert only had to deny a few riders one Thursday afternoon in May. His 13 seats were full, and those on the corner would have to wait for the next jitney.
At other stops riders stepped on, paid their $2.25, and took a seat, as jitney No. 151 continued on its roughly hour-long loop around the city.
Weipert has been at it for 23 years, and he has no complaints about driving.
"It's worked for 100 years," he said. "Summer's busier, a lot more tourists. But during the winter, it's the local people that really keep us going."
Ask everyday riders and they'll tell you, too: the jitney system, operating here since 1915, is largely considered a convenient, reliable mode of transport for residents and visitors. But with a few tweaks— including extra seats, expanded late-night times and a more widely advertised app — the 190-minibus system could be the example by which other resort transport systems are judged.
Sean Reardon, 29, founder of the Pacific Square Community Association and winner of June's Republican primary for the 4th Ward Council seat, said the Atlantic City Jitney Association could still take notes from a system in South Florida.
"We're light-years behind a lot of other small cities and beach towns in terms of transportation," said Reardon, who moved from Florida three years ago. "The jitney is an affordable transportation method, however, it's not as convenient as things in other cities."
The jitney system that runs through all of Miami, in place since 1950, deploys fewer jitneys (70 v. 190) of a greater size range (9-28 seats v. 13) that drive along more routes (7 v. 1) than in Atlantic City. Miami's jitneys are also largely privately owned, and drivers pay "a weekly fee to the certificate holder for the right to operate in the approved route."
Geographically, Miami is more than three times as large as Atlantic City, and has about twelve times the population. But the jitneys in Florida's most populous county — and most famous seaside resort — are complementary to a system of about 1,000 traditional buses, meaning — in comparison — Atlantic City's drivers carry most of the burden of tourists and residents using public transit to get around.
Still, it functions in largely the same way. The jitneys run "on an authorized fixed route between fixed terminals on a semi-fixed schedule where service is not prearranged and individual passengers hail the vehicle and pay a fare," said Karla Damian, a spokeswoman for Miami-Dade County's Department of Transportation and Public Works.
Riders have their suggestions. Shaina Bo, 23, works at Mrs. Fields cookies in Tropicana and takes the jitney there from her home in the Lower Chelsea area. She only ever has a problem when her job keeps her late into the night, when the jitneys come around less frequently.
"It's kind of hard to wait for 30 minutes," Bo said. "Especially when it's cold (and) wintertime."
Edward Selva, 26, paid cash when he got on at his stop near Columbia Avenue to go to his food runner job at Harrah's Resort.
Selva has few complaints, having taken the jitneys in Atlantic City his entire life. He just wants the drivers to be less aggressive.
The culprit, Reardon said, is a "glut" of stops.
"I think that's why they drive so erratically," he said. "You're always gunning it and then you're hitting the breaks and gunning it."
The jitneys' speed and size make them a problem, said Reardon. They're too wide for the streets, and they drive down Pacific Avenue at "frightening" speeds, he said.
The city, for its part, seems satisfied with the system. Director of Planning and Development Barbara Woolley-Dillon called the jitneys "a very cost effective way to go somewhere."
She has a point, in more ways than one: the jitneys also connect the city's points of interest with no cost to the city.
What the jitneys do well is form a functioning circulatory system within city limits, whereas buses and trains work to keep Atlantic City connected to the outside world. That's especially important in a town where few residents own cars, something Geoff Rosenberger, a member of the 1st Ward Civic Association and a South Inlet resident, chalks up to a high poverty rate.
"All the neighborhoods, somewhere, have some kind of ... a jitney stop within a few blocks of themselves," Rosenberger said.
There are seven groups of jitneys which run in shifts, according to the Atlantic City Jitney Association's bookkeeper, Desiree Flath. There are about 20-25 jitneys on the roads at any given time, she said.
But the rise of ride shares as a convenient option for getting home from a night of drinking, and the waning success of casinos here, could make investing in a jitney less appealing.
In 2015, a franchise in the system could cost around $180,000 according to a previous report. Now, Weipert says that figure is closer to $100,000 to $110,000.
"(Income) was better five years ago, before the casinos opened up in New York and Pennsylvania. It was a lot better, you know, you made a good living at it," Weipert said. "Now, you're just kind of surviving."
WEST WILDWOOD — The nonpartisan commission form of government used here, where the mayor is under a cloud of state ethics charges, gives more power to elected officials than other types of municipal organization, according to local government experts.
“The commission form places the elected officials as department heads,” said Marc Pfeiffer of Rutgers University’s Bloustein Local Government Research Center.
In other forms of government, like the mayor-council form, elected officials serve as local legislators and at most committee chairs, he said.
The commission form also requires a different process for replacing officials who resign, as Commissioner Cornelius Maxwell recently did after Mayor Christopher Fox’s ethics fines became public and Fox lost his job as Wildwood business administrator.
Since it’s a nonpartisan form of government, no political parties are involved. So rather than taking nominations from a party’s county committee, the remaining commission members may appoint a replacement, said Cape May County Clerk Rita Marie Fulginiti.
Fox was fined a state record $24,900 by the state Department of Community Affairs’ Local Finance Board for among other things, allegedly voting on Police Department matters such as promotions and raises that benefited Police Chief Jacqueline Ferentz — the woman with whom he lives.
The board said Fox violated state ethics laws when he voted in favor of designating himself director of public safety, with oversight of the Police Department, 10 days before the borough reinstated Ferentz as a police officer and about a month before she was named chief.
He has appealed the fines, he said Wednesday. But the Local Finance Board spokesperson said Friday it had received no appeal or payment from Fox.
Ferentz also won a $1.7 million judgment against the borough, which its insurance company won’t pay, saying the municipality didn’t adequately defend itself in the lawsuit. So taxpayers are paying her $5,000 a month for 200 months, and her attorney almost $18,000 a month for 42 months.
“The commission form, in particular, has developed over time on Wildwood island, where there is an active role as commissioners in running the day-to-day activities,” Pfeiffer said.
Fulginiti said Friday she is meeting soon with West Wildwood Municipal Clerk Donna Frederick to talk about planning for the November election to fill Maxwell’s one-year unexpired term.
“They otherwise wouldn’t have had one,” said Fulginiti, since the next scheduled election wasn’t until November 2020.
Under the rules for commissions, all three municipal representatives are elected every four years.
The traditional election month for commissions is May, but West Wildwood had chosen to move its election to November along with partisan towns.
“My focus as county clerk is on the election side of it,” Fulginiti said.
Appointing a temporary replacement for Maxwell is the focus of the governing body.
She said the two remaining commissioners can choose to appoint a temporary replacement, but are not required to do so.
Residents attending last week’s commission meeting in West Wildwood asked what would happen if the commission had to vote on a police department matter in which Fox would have to abstain, leaving only Commissioner Scott Golden able to vote.
One vote isn’t enough to pass anything, officials acknowledged.
But Pfeiffer said there is an emergency provision under the law for elected officials to vote on issues about which they have a conflict of interest, if there is no time to wait for another member.
“Those circumstances are very rare,” said Pfeiffer.
Pfeiffer also happens to have a connection to the Wildwoods. He was the city of Wildwood’s first business administrator for 18 months in the mid-1980s, when the city briefly changed from a commission to a mayor-council form of government, he said.
It’s not unusual for commission governments to hire an administrator, Pfeiffer said. But it is more unusual for a municipality the size of West Wildwood to have both a municipal clerk and administrator, as it does, along with a deputy municipal clerk.
The .3-square-mile borough had a 2018 population of 558 according to the U.S. Census Bureau.
“Given the size of West Wildwood, arguably it would justify having a single clerk/administrator,” Pfeiffer said.
ATLANTIC CITY — A firm hoping to build wind turbines off the city’s coast is opening an office in the resort this summer, the second offshore wind company to set up shop on the island in the past year.
Atlantic Shores Offshore Wind LLC is searching for a small space to house about 10 employees, said Chris Hart, president and managing director of the company.
“We want to lay our foundation in Atlantic City,” Hart said. “We’re working with a developer to find the perfect spot for us.”
The firm, a joint venture between EDF Renewables North America and Shell New Energies, isn’t the only company interested in Atlantic City’s waters, which researchers say provides a good environment for wind farms.
Atlantic Shores submitted a bid in December to the state Board of Public Utilities to build eight to 20 miles out in federal waters. It wants to build in a 180,000-acre lease area between Atlantic City and Barnegat Light a project capable of generating 2,500 megawatts of wind energy.
The firm, along with two other wind companies, is waiting for the state utility agency to select which firms will receive ratepayer subsidies for 1,100-megawatt wind projects — a decision that will come by the end of June.
Hart said as many as 10 workers in the office will focus on “early development work” until its wind energy plans are approved and funded.
If it moves forward, Hart said, more employees will be hired at the site for operations and upkeep of the turbines in the coming years. The state is opening two additional 1,200-megawatt solicitations of offshore wind capacity in 2020 and 2022.
Workers will need to take transfer vessels to the turbines for periodic maintenance throughout the wind farms’ life of about 20 to 30 years. Hart hopes Atlantic Shores will be running by 2025.
“The real value (of the office) is around operations and maintenance of the wind farm once it’s built. ... Instead of taking a truck out to the site, you’re taking a boat,” said Hart, who joined the firm last year after working in leadership positions at the U.S. Department of Energy.
He also led ExxonMobil’s review of the world’s largest floating offshore wind project in Norway.
Atlantic Shore is one of two renewable energy companies that has set its sights on Atlantic City.
Danish company Orsted opened an office in the city last spring on the ground floor of the Bella Condominiums facing Pacific Avenue as it gears up for its 3,000 megawatt Ocean Wind project planned for 10 miles off Atlantic City’s shoreline.
The company said it will generate 1,000 jobs during its two- to three-year construction cycle and another 100 permanent jobs for 25 years.
New Jersey’s ambitious offshore wind goals come as states up and down the East Coast compete to construct turbines that will create jobs and jump start local economies. The state’s emerging offshore wind industry is expected to produce 15,000 jobs through 2030, according to New Jersey’s draft Energy Master Plan for 2019 released Monday.
In the race to build, the Jersey Shore may be a prime location for offshore wind, said Joseph Brodie, director of atmospheric research at Rutgers University’s Center for Ocean Observing Leadership.
That’s because the winds are strong and reliable, he said, which ensures there will be a constant source of energy generation. New Jersey also has a broad, shallow continental shelf, making it easier to build there, he said.
“(The companies) looked at a lot of different factors,” Brodie said. “And they determined those were the best spots in the state to build turbines.”
Another phenomenon called “upwelling” that is common along the New Jersey coast in the summer and fall makes the area ripe for wind farms, according to research last year from Rutgers. Upwelling occurs when wind is blowing along the coastline and water in deeper levels of the ocean rises to the surface, making sea breezes more intense.
“New Jersey is unique in that respect,” Seroka told The Press of Atlantic City. “It is home to some of the strongest upwelling along the U.S. East Coast.”