ATLANTIC CITY — Community leaders touted the Casino Reinvestment Development Authority’s $12.6 million plan to renovate office space for the city’s Board of Education, while a parent and real estate professionals Thursday called it a poor use of money that will harm businesses downtown.

CRDA held a public hearing Thursday on its proposal to renovate 25,000 square feet of space at Jim Whelan Boardwalk Hall for the school board to occupy rent-free, allowing it to move from its current rental location where it pays $650,000 a year.

The project would use $10.5 million in luxury tax funds and $2.1 million from the school district.

It’s a way of using luxury tax funds to help the schools, while improving portions of the hall left vacant for decades, said CRDA Director of Project Implementation Thomas J. Meehan, who acted as hearing officer.

Under state law, the luxury tax on resort hotel rooms, ticket and alcohol sales can only be used at Boardwalk Hall and the Atlantic City Convention Center for debt payments, construction and maintenance.

The school board would leave the building it’s been in since 2005 at 1300 Atlantic Ave., across from the county building and city library.

Charles Goodman of the NAACP said the project will save the school district money it can put into programs for kids.

“It will last past all of our lifetimes, probably,” Goodman said. “It’s one plus the CRDA will have on its report card, because there’s not many.”

The move would hurt smaller businesses downtown and undermine existing leases and property values there, the real estate brokers said.

“Everything in the area gets pushed down,” commercial real estate broker Josh Levin said. “You are also planning to move the CRDA. ... It’s not going to be just the school district — other organizations are going to pull out (of downtown), too.”

CRDA also is looking to spend an additional $8 million to renovate other parts of the building for its own offices, freeing up its building on Pennsylvania Avenue for sale. But that proposal has not come up at a meeting yet.

Levin said the CRDA should do an economic impact study, including data on what the board would have to pay in utilities and other costs at Boardwalk Hall, to get an idea of the true impact of the plan.

The real estate professionals pointed out the savings likely would be much less than $650,000 a year, as the board would still have to pay for utilities, janitorial and maintenance, which are included in the current rent. They estimated those costs at $150,000 to $250,000 a year.

Frank Barbera, who said his family has lived in the city for more than 100 years, said CRDA was using flawed numbers.

“You are not telling us what the CAM (common  area maintenance) charge is going to be for the Board of Education. They are not getting free utilities,” Barbera said.

He said there is probably more than 65,000 square feet of office space in Boardwalk Hall.

“Who’s next?” he asked.

Superintendent Barry Caldwell said the board will leave its current 18,000 square feet at the CitiCenter building whether the plan goes through or not.

School board President Pat Bailey said she has been hearing complaints from parents for years about how much the board spends on rent.

“We have got to go, y’all,” she said.

Sixty to 65 employees work in the district offices, Caldwell said, but meetings and training sessions are held there that often need to accommodate about 82 employees at a time.

The school board has not provided a list of employees who work in the board offices and what they do. The Press submitted an Open Public Records Act request for the information July 23.

The CRDA board gave preliminary approval of project eligibility to the plan at its meeting last month, but the vote was split. Several CRDA board members have said they needed more information, and two voted against it, saying it fell outside the CRDA’s mission of promoting the city and its tourism and business environment.

Meehan will give his recommendation to the board for consideration, and it may vote on the plan at its next meeting, 2 p.m Aug. 20 at 15 S. Pennsylvania Ave.

Atlantic City resident Pleasure Blackwell, whose children attend city schools, said she opposed the plan because the money would be better spent improving the condition of the schools.

“When our children have mold in school ... that’s the first thing you guys should have tackled,” Blackwell said. “We are low-income, working parents. Most of us are single. We are trying to provide for our children and make sure they have a safe, clean environment in school. Yet you guys are funding meeting space our children will not be utilizing.”

Goodman agreed with her about addressing problems in school buildings but called the renovation a win-win for everyone, since it allows use of luxury funds to help the schools.

Contact: 609-272-7219 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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