ATLANTIC CITY, N.J. (CBSNewYork/AP) – Reeling from four years of cutthroat competition that has stolen nearly a third of its business, Atlantic City on Tuesday got the news it has long been waiting for: the stalled $2 billion Revel casino project will resume work next week and will open in the summer of 2012.
Finishing Revel has long been seen as the single biggest move the nation’s second-largest gambling market could do to fight back against regional casinos popping up all around them, as well against as the general sense that Atlantic City’s best days were behind it.
Gov. Chris Christie made the announcement at a bill signing ceremony in the atrium of the half-finished casino, whose exterior is done but whose interior is empty. The governor signed a rescue package for Atlantic City, setting up a state-supervised tourism district with better police protection and sanitation, and relieving the city’s 11 casinos of some of the strict regulation to which they have long been subject.
“We are all standing at Revel this morning because beginning at the end of next week, construction will begin again on this site,” Christie said as electricians, steel workers and other construction workers cheered. “Revel will be completed.”
Kevin DeSanctis, Revel’s CEO, “and his group will be able to say that all of the financing will be in place,” the governor said.
DeSanctis said afterward that final financing had not been secured as of Tuesday afternoon.
“We are optimistic,” he said. “It could happen any day now, with a closing expected by the end of next week.”
Christie said Revel Entertainment has lined up $1.15 billion in private financing for the project. The state of New Jersey will contribute $261 million in tax-increment financing through its Economic Development Authority to be used for infrastructure improvements in the vicinity of the casino once it is up and running.
The state adopted a new requirement, starting with the Revel project, that any development receiving $50 million or more in tax increment financing provide the state with “success reimbursement payments” from the project commensurate with the extent of state’s financial participation. Revel will share 20 percent of its profits with the state, up to a maximum of $261 million.
“When Revel is the success I know it will be, the taxpayers of the state of New Jersey will participate in the success of it,” Christie said. “The state of New Jersey is now 20 percent partners with Kevin DeSanctis on the upside” of the project.
A spokesman said after the news conference that the state will not hold an ownership interest, and has “no downside risk.”
DeSanctis said a scaled-down version of Revel will open with 1,100 hotel rooms, down from the 1,900 originally envisioned. He said he still intends to build the remaining 800 rooms at some point in the future.
When fully operational, Revel will employ 5,500 people. It will generate about 2,000 construction jobs, providing a much-needed boost for the southern New Jersey economy.
But just as big is the psychological boost that completion of Revel will provide for Atlantic City. Work began on the casino in 2007 before the national recession hit and credit markets dried up. Revel ran out of money in January 2009, and stopped work on the interior.
Wall Street giant Morgan Stanley, the project’s major backer, pulled out in April 2010, deciding it was better to take a nearly $1 billion loss on the project than see it through to completion.
“It’s extremely important psychologically for the city,” Christie said. “When the project stopped, it was a real downer. It led to all sorts of bad conclusions about this place.”
Nothing about Revel has come easily. Six months before its developers ran out of money, and interior construction slammed to a halt, three key executives working on the project died in a plane crash in Minnesota.
The city’s casino service workers union campaigned against a $350 million tax break the casino sought, fearing the new development could cause other casinos to close and throw its members out of work.
Even the wind has targeted Revel, toppling a construction crane off its roof. And when welders were dismantling what was left of the crane, part of the building caught fire.
The ocean-themed casino is being built at the northern end of the Boardwalk, next to the Showboat Casino Hotel. Its gently sloping contours are designed to appear sculpted by ocean waves.
The state-run tourism zone signed into law Tuesday encompasses the Boardwalk, marina district, The Walk shopping outlets and other prime areas of the city. State and city police will partner to provide patrols for the district, which will be overseen by the Casino Reinvestment Development Authority. The agency will also have power over sanitation, traffic, planning and economic development in the zone.
A $30 million fund to market and promote Atlantic City will be part of the zone, paid for by the casinos with savings from the other major part of the plan, the regulatory reform bill. That measure frees the casinos from regulations they found onerous and costly, like some licensing and oversight functions, and having to pay for state casino inspectors around the clock on the gambling floor of all 11 casinos.
“These bipartisan reforms will increase the competitiveness of the Atlantic City gaming industry, attract new tourism revenue and investment dollars, foster economic growth and jobs, and save millions of dollars in annual regulatory costs,” said Bob Griffin, CEO of Trump Entertainment Resorts, which owns three casinos here. He also is president of the Casino Association of New Jersey, the industry’s trade group.
“The long-term revitalization of Atlantic City begins today, and we are proud to be a partner in that effort,” he said.
(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)