ATLANTIC CITY — Resorts Casino Hotel, looking to diversify beyond its slot machines and table games, plans to grab a share of the corporate meetings market by building a new conference center.
The $9.3 million project was unveiled Tuesday during a board meeting of the Casino Reinvestment Development Authority, the state agency that uses revenue from the casino industry for housing projects and economic development in Atlantic City.
Construction is scheduled to begin in February and be completed by July, allowing Resorts to immediately capitalize on the project by tapping into the extra business created during the city’s normally bustling summer tourist season.
Resorts business consultant Cory Morowitz told the CRDA that the conference center will cater to smaller corporate meetings, a segment of the market that is generally overlooked by Atlantic City now.
“This project speaks to a specific niche,” Morowitz said.
Plans call for 11 meeting rooms and 12,000 square feet of space. Resorts has not yet developed architectural renderings. The project will piggyback on nearly $60 million in upgrades to Resorts’ casino floor, hotel rooms and nongambling attractions since New York real estate magnate Morris Bailey bought the Boardwalk property in late 2010.
“The project completes the repositioning of Resorts,” Morowitz said.
Morowitz noted that under Bailey’s ownership, Resorts has been transformed from a tired, money-losing casino to a much more vibrant property that has begun turning a profit.
Resorts’ partnership with singer-songwriter Jimmy Buffett’s Margaritaville brand brought an entirely new vibe to Atlantic City’s oldest casino by adding $35 million worth of tropical-themed bars, restaurants and gambling space in 2013.
John Palmieri, the CRDA’s executive director, said the conference center meshes with Atlantic City’s strategy to diversify its attractions beyond casino gambling. It will also make Resorts more competitive as it fights for business in a market battered by an economic crisis that has seen four casinos fold so far this year and the possibility of Trump Taj Mahal Casino Resort closing its doors on Dec. 12.
The CRDA will help finance the conference center by fronting Resorts $3.6 million of its reinvestment credits with the agency. Resorts will later seek reimbursement of $5.7 million of future reinvestment payments to the CRDA to complete the project’s funding, Palmieri said.
“We’ve done this before. It’s not uncommon,” Palmieri said of how the CRDA has similarly funded other casino projects.
Resorts’ project will be far smaller than a new $126 million conference center opening next year at Harrah’s Resort, but it does fit in with the city’s overall theme for more corporate business. Harrah’s is building 100,000 square feet of conference space to attract more corporate meetings. The CRDA is providing $45 million of financing for the Harrah’s project.
Overall, the Northeast conference market is worth $16 billion, but Atlantic City currently gets only about 1 percent of it. Morowitz said fewer than 2 percent of Atlantic City’s visitors come for conventions, compared to about 13 percent in Las Vegas. Atlantic City hosts about 160 meetings annually, just a fraction of the 22,000 corporate events in Las Vegas, he added.
William Cheatham, a long-time Atlantic City resident, recalled how the old Chalfonte-Haddon Hall Hotel, Resorts’ predecessor, would make a big push for conventions during the winter to help carry it through the traditionally slow off-season.
“This is ideal,” Cheatham said of Resorts’ conference center. “This is what all of the casinos need to do — drive conventions to their home.”
At the same time Atlantic City is looking to expand its commercial projects, it is also hoping to build up its housing stock to attract new residents. One housing project that includes backing by former NBA superstar Shaquille O’Neal received a boost from the CRDA on Tuesday when the board granted final site plan approval.
Boraie Development LLC, based in New Brunswick, Middlesex County, is partnering with O’Neal to build a 250-unit apartment complex in a barren area within the city’s South Inlet neighborhood. The $60 million apartment project is seen as key for transforming vacant property in the shadow of the now-shuttered Revel Casino Hotel.
Boraie, which previously announced plans to break ground by year’s end, still must line up the private financing for the project. The CRDA will provide public financing in the form of a $30 million loan, but that money will not be released until Boraie secures the private funding.
Palmieri said the CRDA’s final site plan approval will allow Boraie to line up the private financing and perform a feasibility analysis for the project. Both the private financing and feasibility analysis are prerequisites for CRDA funding.
Robert Mulcahy, vice chairman of the CRDA, questioned Palmieri whether it was appropriate for the board to approve Boraie’s site plan before the company completed its financing package.
“My concern is that we have asked for these documents for several months and haven’t gotten them,” Mulcahy said, referring to the private financing and feasibility analysis.
Palmieri assured Mulcahy and the rest of the board members that Boraie’s final site plan approval was a prelude to the private financing and feasibility analysis. Although the CRDA vote moved the project along, it did not commit the authority to fund the project, he added.
“This doesn’t obligate us to do anything,” Palmieri said.
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