ATLANTIC CITY — Rare dissension is roiling the Casino Reinvestment Development Authority, over a state-supported plan to spend $12.6 million to renovate offices for the city’s Board of Education.
Most issues brought up at CRDA board meetings inspire little debate, and votes are usually unanimous. But the vote was split over the plan, which would give the school board free rent at Jim Whelan Boardwalk Hall indefinitely, when it came up for a preliminary vote in July.
A final vote, which may happen Tuesday, is expected to be even more contentious after three of nine high-ranking staff members recently resigned.
It’s all happening at a time when the state agency is shifting its focus away from bolstering the casino industry to making changes called for in the state’s transition report on Atlantic City, co-authored by Jim Johnson, special counsel to Gov. Phil Murphy.
The report called for strengthening local government, more programs for youth, and job and community development.
ATLANTIC CITY — Community leaders touted the Casino Reinvestment Development Authority’s $12…
“The focuses of an organization can change based on conditions of the day,” said Marc Pfeiffer, senior policy fellow and assistant director at the Bloustein Local Government Research Center. “That is appropriate and good public policy.”
However, some CRDA board members feel it isn’t in the authority’s mission to build office space for the school district, in this case by converting 25,000 square feet of long-vacant space in Boardwalk Hall using luxury-tax funds.
“Office space doesn’t comport with what I think the CRDA should be doing,” said board member Debra DiLorenzo after the July vote. “I’d like to see the priorities of the authority looked at with our limited resources.”
School officials say it would allow them to save the $650,000 a year they currently pay in rent — including utilities, parking, maintenance, janitorial and security — for about 18,000 square feet at 1300 Atlantic Ave., across from the Atlantic City Free Public Library and the Atlantic County office building. But no one has done an analysis of how much it will cost the school board for utilities, janitorial and other expenses not included in the free rent, a CRDA official acknowledged at a recent public hearing.
The state Department of Community Affairs, which is in charge of the state takeover of the resort, favors the plan, said spokeswoman Lisa Ryan.
“The CRDA proposal ... would allow the school district to allocate more of its budget to youth programs and activities,” Ryan said in an email response to questions. “Such programs can emphasize the development of STEM skills and college readiness, and expose the city’s youth to a variety of career opportunities and professional paths, all of which leads to a brighter future ... and an attractive workforce for companies hungry for educated, talented employees. For these reasons, DCA is supportive of the CRDA proposal.”
Over the past year, the state agency has funded various community-oriented programs, including community policing and bringing a grocery store to the resort.
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Strong disagreement is to be expected in a time of transition such as the one CRDA is undergoing, Pfeiffer said.
“It can create some disruption in organizations,” he said, stressing he has not studied the particular dynamics at CRDA but was speaking generally.
But the question of whether CRDA should spend $10.5 million of its luxury tax funds and $2.1 million of school district funds on creating office space has also brought up practical questions.
The district currently rents 18,000 square feet for its 60 workers at 1300 Atlantic Ave., having sold its office building about 15 years ago in a bid to save maintenance costs. Superintendent Barry Caldwell has said the board needs more space than that, as it has to accommodate up to 82 people at times when training sessions and meetings occur.
A 25,000-square-foot space works out to 416 square feet per worker, almost twice the state average of 244 square feet per person in office buildings in 2017, according to national real estate company Cushman and Wakefield. That’s enough to give each worker what the realty company considers a large private office.
Even for 82 people, it works out to 304 square feet per person, for each worker and each visitor/trainee/meeting attendee.
Atlantic County freeholders who represent Atlantic City also expressed skepticism about the plan at last week’s freeholder meeting.
Ernest Coursey, a Democrat who represents Atlantic City and Pleasantville, said he thinks CRDA is putting the school board idea out as cover for its plans to also spend $8 million to renovate office space for itself there and sell its current offices on Pennsylvania Avenue for about $3 million.
He said he only recently heard about those plans, which have been discussed privately but not at public CRDA meetings.
Freeholder-at-large Frank Formica said the move would hurt the downtown business district.
“At the end of the day, I want to know how (CRDA) wants to take 80 people away from the central biz district and put them on the Boardwalk where there isn’t a concentration of businesses,” Formica said.
CRDA Executive Director Matt Doherty has stressed the school board project is a way to use luxury-tax funds to help the city. By state law, luxury-tax funds can only be spent on debt service and construction or maintenance projects at Boardwalk Hall or the Atlantic City Convention Center. They are increasing as the city rebounds.
Ryan said the DCA would be open to more expansive use of the tax.