Jim Whelan Boardwalk Hall in Atlantic City

The Pacific Avenue side of Jim Whelan Boardwalk Hall, as seen in 2015. A plan to spend $12.5 million to renovate a long-unused area of the hall along Pacific Avenue is being considered by the Casino Reinvestment Development Authority.

ATLANTIC CITY — With questions hanging in the air, the Casino Reinvestment Development Authority on Tuesday gave preliminary approval to spending $10.4 million to renovate parts of Jim Whelan Boardwalk Hall for the Atlantic City school board to use rent-free for its offices.

Some CRDA board members questioned the cost and appropriateness of the plan, and the board will have time to do more research, said Executive Director Matt Doherty. There will be a public hearing before a final board vote.

If the project moves forward, it would free up about $650,000 a year the school board now pays in rent for its offices at 1300 Atlantic Ave., allowing it to expand existing social and emotional learning programs, said Superintendent Barry Caldwell.

But there were many questions about whether it is the best way for CRDA to spend its limited funds.

“Office space doesn’t comport with what I think the CRDA should be doing,” said board member Debra DiLorenzo, one of two who voted against it. “I’d like to see the priorities of the authority looked at with our limited resources.”

Boardwalk Hall would be a safer location for the offices, Caldwell said, and would save hundreds of thousands of dollars a year in rent money that many parents have criticized the board for spending.

But board member Howard Kyle pointed out there is a strip club across from Boardwalk Hall on Pacific Avenue.

“Where we are at 1300 (City Center Building) shares some of the dangers,” said Caldwell of the board’s current offices. “In our alleyway we have prostitution, drug use — next to 1300 is a recovery center — our students and parents face every day.”

Parents mainly visit board offices to register children for school, and the board has about 80 employees in its current offices, owned by Diversified Capital in Lakewood, Caldwell said.

The total budget is $12.5 million, and the school district would kick in about $2.1 million, leaving the CRDA to cover $10.4 million, said CRDA Chairman Bob Mulcahy.

“I understand the motivation and worthiness (of the plan), but CRDA does not have a lot of money left,” Kyle said.

“It’s the general fund that is getting depleted,” Doherty said.

The project allows the board to tap the Luxury Tax fund instead, Doherty said. Luxury tax revenues are replenished each year through taxes on event tickets, hotel rooms and alcohol and are increasing in a stronger economy.

Luxury funds are restricted to paying off bonds on the Convention Center and Boardwalk Hall, and to capital projects on the two buildings, Doherty said. This project is a creative way to use the funds to also help schools and students, he said.

Board member Edward Gant questioned whether the school board should be asked to kick in more than just $2.1 million, since it may get a windfall from increased casino payments in lieu of taxes this year. He suggested paying the school board’s rent for a year to free up funds for students, and waiting to see whether the board has more to contribute at the end of the year.

But Caldwell said the board has two years left on its lease and needs to move out at the end of it to avoid having to make a large balloon payment and face increased monthly costs. It cannot wait to start an alternate plan, he said.

But he did suggest the school board may be able to fund more of the renovation if it’s part of the casino PILOT increases this year.

Right now, Boardwalk Hall is largely empty much of the time, Mayor Frank Gilliam Jr. said.

“Boardwalk Hall would have more life in and around the building on a daily basis,” Gilliam said. “It’s a good idea.”

Voting no were CRDA board members DiLorenzo and Kevin Ortzman.

Many of those voting for it Tuesday made it clear they need more information.

“This process allows us to determine more details, to give a full understanding to the entire board so we can make an informed decision,” said CRDA Vice Chairman Richard Tolson.

Contact: 609-272-7219 mpost@pressofac.com Twitter @MichelleBPost

Staff Writer

In my first job after college got paid to read the New York Times and summarize articles for an early online data base. First reporting job was with The Daily Record in Parsippany. I have also worked in nonprofits, and have been with The Press since 1990.

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