Location: How did you first get into the hotel business?
Mr. Bashaw: When I got out of college, I bought a building in Cape May, N.J., and renovated it into a hotel in 1989, called the Virginia. … And then we bought another one called Commerce Hall, which we opened in 2002; 110 rooms, built in 1879, really amazing building.
Sounds like a lot of renovation work.
Well, we love renovating. That’s why this Atlantic City project is so fun for us.
So, these are two hotels, a HoJo’s …
And a Holiday Inn, and we’re combining them.
Why combine them?
Well, they’re right next door to each other, and it just made sense. … The HoJo’s was built in the ’60s as a kosher hotel called Teplitsky’s, and the Holiday Inn was built next door in the 1970s as sort of this nondescript thing. We kind of pulled the patina in from the HoJo’s into the Holiday Inn, and we’re doing this sort of Hollywood glamour thing, heyday of Atlantic City. …
Were these properties just available at the same time?
Same owner. Very cool guy who’d been down here forever. We negotiated for a long time. … We bought these buildings in January 2007. Of all the existing hotels in town, they were ones that had the most character and were big enough, critical-mass-wise, to make it worthwhile. I mean, there are a lot of smaller little motels that would be 30 or 40 rooms, and that’s a lot of work.
Why are you naming this place “the Chelsea”?
Because it’s on Chelsea Avenue, it’s in the Chelsea neighborhood of Atlantic City, and it’s on the site of the old Chelsea Hotel from the 1800s.
Now, does this Chelsea Hotel from the 1800s predate the Chelsea Hotel in New York City?
Really? Because I believe the Chelsea Hotel in New York City dates back to 1883. I believe it was originally the city’s first co-op.
Well, then, they’re pretty closely aligned time-wise, but [the one in Atlantic City] was torn down in the 1960s.
Are you trying to pick a legal fight with those guys or what?
They don’t have a trademark.
Let’s run through the stats: $110 million; 330 rooms; two Stephen Starr restaurants; bars and lounges with touches by Beatrice Inn impresarios Matt Abramcyk and Paul Sevigny; a 7,500-square-foot spa; and a 15,000-square-foot outdoor pool and roof deck—but no gaming? If there are no slot machines and no blackjack tables in this hotel, where do the hookers hang out?
[laughing] I don’t know.
When you conceived of this project, did you always think that there would be no gaming aspect?
You can’t have gaming without 500 guest rooms. That’s a rule. We thought Tropicana, right next door, might want to connect to us, if Tropicana was renovated. Now it’s for sale, so we’ll see what happens there. We’ve mused about, you know, if our neighbors wanted to sell, we could build a second tower and get over 500 rooms and be sort of a small, intimate casino more like the Palms. And that could be an exit strategy, too, if need be.
From 2003 to 2005, you served under then Governor Jim McGreevey as executive director of the New Jersey Casino Reinvestment Development Authority. This idea—the Chelsea—did this happen while you were with the authority?
You know, when I was with the authority, I was really busy. I was working on the boardwalk revitalization plan, getting the train from New York, a lot of different casino expansion projects. In fact, it was during my time there that we did the financing for the Harrah’s Tower, the Borgata phase two, which is the Water Club that just opened. … But, as I spent time here, I was really getting to understand the power of the market and how unharvested it was.
In my mind, you have this resort, located one tank of gas away from 25 percent of the U.S. population. You’ve got 13 casinos that had been sort of churning and burning from their monopoly from when they founded gaming here until about five years ago, when there started to be real competition.
Borgata, you know, much to the consternation of the sort of local market prejudice—oh, what’s the word, when you believe your own bullshit?—the market just sort of said, ‘Oh, no one can come in and attract younger people. We’re an older person’s market.’
But Borgata did that. The Pier opened, the Trop opened, the Quarter opened, all this retail, and you started to see a different demographic coming. …
So all of that in my mind added up to an opportunity to do something in this town.
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.
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.