ATLANTIC CITY — The Casino Reinvestment Development Authority voted Tuesday to reserve $650,000 a year for after-school programs in Atlantic City, after pulling a vote on a $12.6 million renovation of office space for the school board.
“There was not a consensus among the commissioners that this specific deal was appropriate for CRDA at this time,” said CRDA Board Chairman Bob Mulcahy of the proposed plan to renovate 25,000 square feet of Jim Whelan Boardwalk Hall for the Board of Education to use rent-free.
The school board plan was removed from the agenda Monday night.
Mulcahy and Board Vice Chairman Richard Tolson met recently with Lt. Gov Sheila Oliver, who as commissioner of the state Department of Community Affairs has oversight of Atlantic City government. Mulcahy said the three “agreed to seek a different plan.” The DCA had previously supported the plan.
Superintendent Barry Caldwell had said the move to Boardwalk Hall would allow the district to use rent savings to fund after-school programs for youth.
The school board must now present a detailed plan for programs for Atlantic City youth to use the funding.
“Thank you for putting your money where your mouth is,” said Charles Goodman of the Atlantic City NAACP. “It’s well needed.”
Goodman said he hoped the money could in part be used to make recreation programs available in August.
“Right now in August — the hottest month — there are no activities in our recreation program because schools are closed getting ready for September,” Goodman said. “It happens every year.”
He said the two pools in schools are closed to the community when they are most needed.
CRDA board member Debra DiLorenzo said the board chose the $650,000 figure based on the yearly rent the school board now pays.
“The board felt very touched by the fact that, not only do we need to do programs, but it would have been three years before any money was forthcoming to do it,” said Mulcahy. It would have taken two years for the renovations at Boardwalk Hall to be complete and the board to begin to move there, had the plan been approved.
Mulcahy acknowledged the actual annual rent savings would have been lower, because it would have had to pay its own utilities and other costs related to running the offices.
CRDA Executive Director Matt Doherty, who supported the school board move to Boardwalk Hall, said after the meeting the proposal is under “further deliberations and review by CRDA.”
The school board pays Diversified Capital of Lakewood $650,000 a year in rent for 18,000 square feet in an office building at 1300 Atlantic Ave., which includes utilities, maintenance, janitorial and security. Sixty district employees work at the site.
While it would not have had to pay rent at Boardwalk Hall, it would have had to pay its own utilities and other costs. CRDA has not done a fiscal analysis of what the board’s costs would be at Boardwalk Hall.
“We welcome the CRDA’s decision to slow down, hopefully perform the necessary due diligence and make an informed decision on whether this project is in the best interests of Atlantic City and the CRDA,” said Michael Sklar, the attorney for Diversified Capital.
Sklar placed full-page ads in The Press of Atlantic City this week asking people to call the CRDA in opposition to the plan.
Under the plan, the CRDA would pay $10.5 million from luxury-tax funds, with the school board kicking in $2.1 million. Luxury-tax money can only be used for debt payments and marketing, construction and maintenance at Boardwalk Hall and the Atlantic City Convention Center.
Doherty has said the project would enable CRDA to use luxury-tax funds, which are replenishing as the casino industry rebounds, for the good of city taxpayers.
Luxury taxes on hotel rooms, alcohol sales and ticket prices are expected to increase to $38.5 million this year from $37 million last year.
The $650,000 a year for youth programs must come out of the CRDA’s general fund, which is being slowly depleted because it doesn’t have a large source of funding now. The Investment Alternative Tax that used to fund it now goes to pay down the city’s debt.
According to the CRDA’s Dec. 31, 2018, Financial Statements and Supplementary Information, the general fund had $94.5 million available for new projects at the end of last year and $16.5 million in reserve for projects already approved.
About $21 million has been designated for projects from that fund so far this year, according to CRDA Chief Financial Officer Kathleen Marshall, leaving a balance of about $73.5 million.