The blighted neighborhood surrounding the half-built Revel casino—known to Atlantic City locals as “Pauline’s Prairie,” an area emptied by an ill-fated “urban redevelopment” scheme in the 1960s—is scheduled for a facelift as part of the 1 million tax reimbursement plan announced last month. The revitalization of the South Inlet could have far-reaching implications for Atlantic City, including a surge in local business, increased investment and development, and a more attractive, family-friendly resort.
New Jersey Governor Chris Christie used the atrium of the Revel property as a backdrop to announce that the casino is being awarded an Economic Redevelopment and Growth Grant worth $261 million. Construction on Revel came to a halt last year when investment bank Morgan Stanley wrote down its $1.2 billion stake and announced it was backing out of the project. The grant is in the form of a state sales-tax reimbursement over 20 years, which will begin only after Revel opens for business and starts to generate state taxes. The deal will put people back to work and help Revel secure the $1.15 billion financing needed for completion.
As a condition to the grant, $125 million—close to half of the projected reimbursement—would go to upgrading the Boardwalk and other parts of the city that surround the casino.
“For Revel to work, this part of the picture—these improvements—has to happen,” said state Senator Jim Whelan.
The establishment of a tourism district also has Atlantic City residents optimistic about boosting the city’s economic future.
The completion of Revel could impact other Atlantic City casinos as well. Properties may see a rise in profits with the increase in visitation, though some gaming experts believe this might be a short-term gain and that some smaller operators may be forced to close because of competition.
A recent report by the Wall Street credit ratings company Moody’s Investors Service stated that Revel could ignite competition in the casino convention business. The Revel mega-resort is designed to accommodate large convention groups, a highly profitable segment that currently represents only a small piece of the overall casino market.
“Revel is likely to pursue Borgata’s customer base,” stated Moody’s report. “However, Revel’s success could give a lift to Borgata over the longer term, because Borgata also conducts some group business. We believe Borgata will not sit still in the face of competition for the top spot in Atlantic City.”