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Luxor Capital granted license to operate Ocean Casino Resort

ATLANTIC CITY — Luxor Capital Group was granted a license to operate Ocean Casino Resort after it was able to demonstrate its financial stability since last July to the state Casino Control Commission.

During the hearing Wednesday, Luxor partner Michael Conboy and Ocean CEO Terry Glebocki painted a bright picture for the property, noting that Ocean has not needed money infusions from Luxor — a New York-based hedge fund — in three quarters and stressed expectations to rapidly grow, not only in its brick-and-mortar operations but also particularly in online gaming and sports betting.

“In 2019, our focus was brick and mortar,” Glebocki said. “There was so much we wanted to do from the brick-and-mortar side, and that’s what we did. Our plans for 2020 was a focus on iGaming. … There is a lot of growth opportunity there. We are working with our marketing department, which has been so successful with brick and mortar, and now let’s get them working on iGaming. In the pandemic, we have seen an increase in our iGaming revenue. … Granted it’s a small portion of what’s out there right now.”

Wednesday was the final step in the licensing process for Luxor, which was granted an interim casino license in August that allowed the company to control Ocean’s operation while the Division of Gaming Enforcement conducted a comprehensive investigation. As part of the licensing agreement, the commission lowered the amount of cash Ocean will be required to keep on hand, from $32 million to $25 million. Traditionally, when a property is sold, the new owner is granted a temporary license and then has to apply for the casino license.

In February 2019, Luxor pumped $70 million into the casino, including $50 million to pay down debt. It also assembled a new management team with experience in the Atlantic City market, and set out to correct many of the perceived flaws of the property, including a confusing layout of the casino floor. It also added safety panels to escalators that lifted patrons to the casino floor.

The DGE and CCC agreed that Ocean, led by Luxor, has been financially stable and has demonstrated integrity, leading to the unanimous decision.

For the period beginning July 2019 and ending February 2020 compared with the same period a year earlier, Ocean increased its slot revenue by $41.1 million, up 54%; table games revenue increased $6.4 million, up 17%; nongambling revenue increased by $14.6 million, up 19%, and expenses declined by $5.6 million, down 3%.

That’s a far cry from the property’s opening, when Ocean lost $28 million in the first six months and, at one point, $1 million a week, Glebocki said.

Conboy said Ocean’s success has exceeded expectations.

“Before coronavirus, it was self-sufficient,” he said. “And when we are back to operating normally, I would expect it to be self-sufficient. The trajectory was incredibly positive. I can’t say what a great job the team has done. The rapid nature of recovery surprised Luxor, surprised myself. So the trajectory was bright, but we have to be realistic (when reopening). We expect when we open it will be soft. So we have to focus on cash flow and profitability and tightening the belt straps and pushing off — for six or 12 months — the more grandiose capital plans … but that won’t change anything where Ocean will be five or 10 years from now.”

An Ocean representative said they are holding off on some capital improvement projects because of the virus, including high-end table and slot areas and a casino floor reconfiguration that was supposed to be done by summer.

“My hopes are we can resume once we have more certainty and get through the season,” Glebocki said.

Luxor and Ocean also vowed to continue major capital expenditures, including finishing 12 floors of its hotel tower that were never completed.

“We are working hard and ready to go with the renovation of the 12 floors currently unoccupied in our hotel,” Glebocki said. “We have designs and plans for the rooms. When the time is right, we will be very excited to introduce that new inventory.”

The Associated Press contributed to this report.

GALLERY: A shuttered South Jersey amid the COVID-19 crisis

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South Jersey small businesses say they’ve been locked out of federal payroll protections

Blanche Adams, a longtime leader of the Upper Township Business Association, says local businesses are struggling.

That’s no surprise.

The COVID-19 pandemic, and the extraordinary steps taken to slow its spread, have slammed economies around the world, shuttering businesses, canceling travel plans and roiling markets.

Along the Jersey Shore, a region dependent on tourism, many businesses are in survival mode.

Cape May County submits reopening plan to Murphy

A coalition of Cape May County freeholders, mayors and business leaders submitted to Gov. Phil Murphy on Tuesday a proposal for reopening the county that includes a timeline for allowing short-term and seasonal rentals to resume.

Federal efforts funded under the $2.2 trillion CARES Act seek to keep the national economy afloat. That includes the Payroll Protection Program, with about $349 billion set aside to help businesses keep workers employed or at least on the payroll.

But many small businesses have reported difficulty accessing funds from the PPP and other programs. And in Cape May and Atlantic counties, most businesses are small businesses.

“We’ve had some members that have applied for aid. Some members couldn’t get through. Nobody has received any money yet,” Adams said. She and other UTBA members have polled businesses in the township. Some are able to remain open, including restaurants offering takeout and vital services, while others have gotten innovative and found ways to serve customers online.

But all are struggling, and some may not make it through the season.

The PPP was intended to help businesses with up to 500 employees meet payroll in the short term. But revelations that companies like Shake Shack and the Los Angeles Lakers were able to use the program drew frustration across the country. Meanwhile, many shore businesses have fewer than 20 employees.

Workers want virus protections before casinos reopen

ATLANTIC CITY — Casino workers across the country want their employers to provide them with protective equipment and adopt tough new cleaning and social distancing policies before the gambling halls reopen during the coronavirus outbreak.

Michele Gillian, executive director of the Ocean City Regional Chamber of Commerce, expressed frustration after the first round of funding, which ran out within a day, before many local businesses could even apply.

Larger corporations have the staff, the expertise and the contacts to complete the application process.

“I’m not saying they’re not hurting. But we’re hemorrhaging,” she said. She described the application process as onerous and said many Ocean City businesses are managed directly by the owners, who may have little time to devote to securing the loans.

Managed through the federal Small Business Administration, the PPP loans are especially attractive because they can be forgiven if the businesses meet certain criteria, including keeping staff on the payroll. The idea is to keep people out of the unemployment system, which has seen a massive spike in applications, and to keep money flowing in the economy.

Adams and Gillian said their organizations have sought to help business owners through the process and inform them of the available options, a task multiple organizations have taken on.

In Atlantic City’s Chelsea neighborhood, the Chelsea Economic Development Corp. is taking similar steps.

“We’re trying to make sure those businesses that can qualify know how to apply,” said Elizabeth Terenik, the organization’s director.

But there were other hurdles and roadblocks. Several sources mentioned restrictions that seemed to automatically disqualify most Jersey Shore businesses, including one basing the application on the number of employees the business had on payroll in January.

Pandemic showcases CRDA's focus on Atlantic City

ATLANTIC CITY — Starting about 6 a.m. and working through the day, a small team of employees and volunteers from Mike B’s Café and Cedar Food Market cooks and prepares hundreds of meals inside the kitchen at the All Wars Memorial Building for senior residents.

“That changed on Thursday,” said Cape May County Freeholder Will Morey, one of the leaders of a task force formed to aid the county’s economic recovery. What began as a clearinghouse for information on programs like the PPP has grown to become the Cape May County-Wide Recovery Initiative, which has gathered representatives of multiple industries and the 16 municipalities in the county to work on a consensus plan for reopening.

The situation is evolving rapidly, Morey said.

“We’re in an environment where things are changing by the hour, not just by the day,” he said. The person who may not have qualified yesterday may qualify today.”

Many business owners have specific skills that have allowed them to thrive, Morey said, but those are rarely applicable to filling out lengthy applications. Another issue is that some businesses are so small they are not commercial customers of banks that offer SBA loans.

Multiple sources indicated banks looked after their regular customers first, leaving few options for others.

There are some glimmers of hope. Last week, the SBA began processing applications for a second round of PPP funding, with $310 billion reportedly available.

Candice Caruso, senior vice president of government guaranteed lending for WSFS, a Wilmington, Delaware-based bank with a growing footprint in South Jersey, said they’ve reached out to the SBA district office, letting them know they can help those who have not banked with them before.

Small business loan program targets South Jersey businesses

VINELAND — Hoping to address the immediate financial needs of small businesses impacted by the COVID-19 pandemic, the Pascale Sykes Foundation and New Jersey Community Capital announced the expansion of their THRIVE South Jersey Initiative.

She said her bank has completed loans in Cape May and Atlantic counties, for a total of $91.5 million to 536 businesses.

“Particularly in the beach communities of New Jersey, we’ve gotten feedback from small businesses that they’ve had many challenges in round one in accessing financing. Round two has been better,” she said, with the funding reaching more broadly across the communities.

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State calls in experts to protect nursing homes from COVID-19

The state has hired Manatt, a national business consulting firm, to help it better protect residents and staff in long-term care facilities during the COVID-19 pandemic and in the future, Gov. Phil Murphy said Wednesday during his daily media briefing.

Half of the state’s 8,549 COVID-19 deaths have been among people associated with these facilities, Murphy said.

In some, such as the Hammonton Center for Rehabilitation and Healthcare, the rates of infection and death are much higher than in other nearby nursing homes.

According to the state Department of Health, the center has 157 positive cases and 18 deaths.

Others, like Atlantic County’s Meadowview nursing home and the Vineland Veterans Memorial Home, have only recently had their first deaths and have kept their infection rates lower than many. The Vineland facility has six reported cases and two deaths, much lower than similar veterans homes in Paramus, Bergen County and Menlo Park, Middlesex County.

Meadowview has had its first death, Atlantic County Executive Dennis Levinson said Monday. He also said 36 residents and seven staff members tested positive, but the state Health Department still lists Meadowview with 22 cases and no deaths.

“We are taking aggressive measures in our state to protect residents and staff at these facilities,” Murphy said. “To meet the challenge, we are bringing on a nationally experienced team of experts.”

Murphy said the team will be led by Cindy Mann, a former deputy administrator of the Centers for Medicare and Medicaid Services under President Barack Obama, and by Carol Raphael, former CEO and president of the Visiting Nurse Service of New York and former board chair of AARP.

They will have three principal tasks, Murphy said: to provide immediate support to Health Commissioner Judy Persichilli and her staff; to do a two-to-three week review of conditions at long-term care facilities, and compare the performance of facilities here to other places in the U.S.; and to make recommendations for long-term, systemic reform in long-term care.

“The review will look at (whether) additional protocols, resources and equipment should be put in place to best protect our residents,” Persichilli said. “They will compare New Jersey oversight to other states’ and examine differences in outcomes.”

She said the Health Department will continue implementing protocols, inspections and testing at long-term care centers while the review takes place.

As migrant workers will soon begin arriving to pick crops, Persichilli said the Health, Labor and Agriculture departments are working together to test those in migrant camps, starting next week.

“Singapore thought they had beaten (COVID-19) down to zero, but they had a flareup because of migrant workers,” Murphy said.

“We have a committee ... meeting regularly with a full plan for seasonal workers,” Persichilli said. “Salem hospital is helping.”

She said the department is working with growers.

“We will begin next week to set up a whole system for testing,” Persichilli said.

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NJ colleges to students enrolled out of state: 'Think about coming home'

As the state reels from the devastating financial impact of the COVID-19 pandemic, a coalition of four-year public colleges and universities sent out a joint message to New Jerseyans who left the state for college: “It’s time to think about coming home.”

Ten state colleges have created the New Jersey Scholar Corps and are asking students who are enrolled out of state to return home, attend college in state and help rebuild the economy.

Participating institutions are Stockton University, Montclair State University, the New Jersey Institute of Technology, Rowan University, Kean University, New Jersey City University, Ramapo College, The College of New Jersey, Thomas Edison State University and William Paterson University.

“This is an unprecedented period in our history, a time that calls for everyday heroes to show up and give back. Think of the Peace Corps and AmeriCorps. Think of those natural disasters and crises when young people turned out to fight for what’s right, to push us toward a hopeful future,” the presidents wrote in a joint statement.

Stockton President Harvey Kesselman noted that South Jersey has been hit particularly hard by the pandemic closings as the area relies heavily on tourism, hospitality and other service-based businesses.

“We invite students to come back to New Jersey and join us in taking on the challenge of rebuilding the Jersey Shore and the state,” Kesselman said.

According to federal data, in 2018, more than 31,000 students who graduated from high schools in New Jersey left to attend colleges and universities outside their home state, meaning there are potentially more than 120,000 students who could enroll locally.

The New Jersey Scholar Corps programs will offer students who transfer from accredited out-of-state institutions guaranteed acceptance of credits earned with a grade of C or better, a speedy review of applications, waiver of the application fee and a deadline to apply for financial aid extended to June 1.

They also will have the opportunity to participate in college-sponsored community service activities and service-learning activities.

“We have already seen an uptick in students showing an interest in staying in state to attend college,” Rowan President Ali Houshmand said. “The NJ Come Home campaign provides an added incentive, particularly (for) those who are looking to make a difference in the lives of others. For those studying out of state, now is the time to consider staying home here in New Jersey.”

Association of American College and Universities President Lynn Pasquerella said the program follows a national trend of institutions of higher education looking to expand admissions locally as social distancing guidelines resulting from the spread of the new coronavirus have pushed education online this spring and students across the country are reconsidering where to go to school in the fall.

It remains unclear whether colleges will be able to offer in-person classes come September. With staggering rates of unemployment, she said the financial constraints of students and their parents will also play a role in what college they attend.

“It’s something that colleges and universities across the country are looking to do, recognizing that one out of five prospective college students are saying their plans have changed for the fall, so they are looking to attend a college close to home as opposed to their first choice college, or they can’t afford to go to college,” Pasquerella said.

A survey of 7,000 students by Maguire Associates, a national research-based consulting firm that serves educational institutions, found 16% of students are considering an option closer to home than their original first choice due to COVID-19, and 12% indicated they are considering delaying enrollment for a semester or a year.

In-state public colleges are traditionally more affordable than out-of-state schools, whether private or public. Tuition for Stockton for the fall semester is $7,023, or $14,046 for the year.

The average tuition price for a four-year public college to out-of-state students is $23,890 per year, according to the College Board.

Pasquerella thinks these “come home” campaigns will see success this fall.

“The financial factors combined with the uncertainty with respect to what the fall semester will bring will discourage students from leaving and traveling far from home in the next semester or two,” she said. “This is a transformational moment for higher ed as it is for our society and for the world.”

Pasquerella said it is an opportunity for colleges and state college systems to be innovators and expand access to higher education.

Students and families may learn more at njcomehome.org.

GALLERY: Stockton campus goes quiet amid COVID-19 crisis