What has prompted all this recent reinvestment in Atlantic City?
Three things. One, Borgata opened and proved to the market that there was a whole younger demographic beyond this stereotype that it’s just these four-hour visitors on ventilators.
Two, the fruits of a state initiative. It was a tax incentive program to encourage nongaming investment. It was done through our agency, but before my time. I can’t claim credit.
Basically, it created many urban enterprise zones, so if someone did 150,000 square feet of nongaming retail, dining, entertainment, they got the first $2.5 million in sales tax collected in that district rebated to the project for 20 years. Big incentive. That’s what led to the Walk, the Quarter and the Pier; all three of those projects took advantage of that incentive. …
The third, honestly, was the encroachment of gaming regionally, because all of a sudden, every other state wants to get in on the gaming gig. It was clear to this critical mass of casinos that they’ve gotta do something else. All these other jurisdictions are going to get in on this day-tripping four-hour visitor. So, you know, as I said when I was at the CRDA, it’s time for Atlantic City to return to its roots as a resort.
We have a really beautiful beach here. It’s gradually sloped. You can body-surf until you run out of breath here. A lot of beaches slope up so fast, you scrape your chest as soon as the wave breaks.
You’ve tested it out, I take it.
I love this beach.
Who is the Chelsea’s target demographic?
You know, it’s hard to totally niche your customers. I think there are a lot of people who are not accommodated by the casinos. They want to be approximate to the gaming amenity, but they don’t necessarily want to live in it. …
I think there’s also this new sort of younger urban visitor. We especially think New York could adopt A.C.
New York hasn’t yet adopted A.C., right?
Not in droves. But I went through a similar thing in Cape May, honestly. You know, Congress Hall was a hundred-year-old hotel. We did a soup-to-nuts renovation to it. We made a four-star product with amenities like beach service that the Jersey shore hadn’t seen…
Our ZIP code balance when we opened Congress Hall was 70 percent Philly metro, 30 percent scatter. Now, our Congress Hall ZIP code balance is 52 percent New York metro, 40 percent Philly metro, and the rest is Washington, Richmond and whatever.
In the same vein, I think we’re going to see the adoption of A.C. by the New York market, because of a couple things: one, proximity; two, this train we’re totally jazzed about.
Right, the express train from New York’s Penn Station. Has that started yet?
The train starts third quarter this year.
Didn’t I read that you’re also building a casino now, too?
We have a 10-acre site that we’re getting entitled now. We’ve got some great partners, with institutional equity players out of New York; and we’ll see, you know, as we get through the entitlements, and the choppy credit markets settle a little bit, we’re going to have an awesome development opportunity, and we’ll see how that plays out.