Atlantic City, New Jersey (AP) — The economy is in meltdown, credit is virtually nonexistent, and USD 7 billion worth of new casino development is on hold in Atlantic City.
Perhaps it’s not the best timing, but the city went ahead Tuesday with a plan to solicit bids from developers who could build as many as three casinos on the nearly 150-acre former Bader Field airport property.
„The current financial crisis is a reality, and the (request for proposals) reflects this reality, and the likelihood that it will have run its course by the time Bader Field comes online,“ Mayor Scott Evans said.
„The redevelopment of Bader Field is a cycle-spanning economic development initiative, and the likely bidders for this site are sophisticated organizations that have long-term horizons and understand the flow of economic cycles,“ he said. „They will recognize that the project is likely to have a four-year arc, and that conditions will be different when the project is complete.“
The land is widely considered to be among the most desirable tracts of open space for commercial development on the entire East Coast.
Plans to develop the airport site began percolating even before it was closed in September 2006. But that was well before deteriorating economic conditions delayed mega-casino plans by Pinnacle Entertainment and MGM Mirage.
City officials said the land would be leased, not sold, to one or more developers, with a „substantial“ percentage of the lease payment to be handed over to the city upfront. City Business Administrator Carol Fredericks said that money would form the basis of a property tax relief fund set up to lessen the tax burden on Atlantic City residents and businesses.
The city intends to select a developer — or more than one — by the end of March 2009.
Only one company has publicly come forward with an offer to develop Bader Field. In January, Wyomissing, Pa.-based Penn National Gaming offered USD 800 million for the land and USD 100 million to cash-starved Atlantic City to use as quick property tax relief in return for being able to avoid a lengthy bidding process.
Under the proposal, Penn National would have been able to subdivide the land and get exclusive development rights to one of the parcels to build its own casino, while selling other parcels to other casino developers.
But that proposal created friction between city and state officials worried about getting the best possible use for the site, and Atlantic City eventually committed itself to an open bidding process.
Pinnacle Chairman Daniel Lee said last year the company might be interested in undertaking a second Atlantic City casino project at Bader Field. But the worsening economy that has forced the delay of Pinnacle’s beach house-themed casino-hotel on the Boardwalk where the Sands Casino Hotel once stood makes that seem unlikely right now.
A company spokeswoman could not say for sure Tuesday whether Pinnacle is still interested.
„There’s so much uncertainty about that site, it’s almost impossible to analyze,“ spokeswoman Pauline Yoshihashi said.
Other possible bidders include Boyd Gaming, which co-owns the Borgata Hotel Casino & Spa; Wynn Resorts, and MGM. But MGM‘s proposed USD 5 billion mega-casino next to the Borgata also has been delayed.