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Revised bill would restrict boutique casinos in Atlantic City to new construction
By JULIET FLETCHER Statehouse Bureau | Posted: Wednesday, September 22, 2010
A bill that would allow smaller boutique casinos to open in Atlantic City has been revised so that only newly built properties could qualify, a change that would lead to greater job creation, state Sen. Jim Whelan, the bill's sponsor, said Tuesday.
Whelan's revised bill, which a state Senate gaming committee released Monday evening, also requires that a percentage of the boutique casino's revenue be invested into a "Boardwalk casino zone," said Whelan, D-Atlantic.
The term "boutique casinos" refers to smaller casino hotels of just 200 rooms, rather than the standard 500 rooms currently required for a casino license in Atlantic City.
Whelan first proposed the boutique casino legislation in April, but his bill got a frosty response from casino executives and representatives. Whelan's earlier bill proposed that four boutique casinos be allowed to open. The bill didn't prevent existing hotels or properties from seeking casino licenses to operate smaller gaming halls.
Whelan said he changed his mind and restricted the new licenses to fresh construction because it would bring construction jobs to the region and would fill blighted blocks with new structures.
The amendments to the bill were voted through in the state Senate on Monday evening. The bill could be voted on in the next full Senate session. An Assembly version of the bill has not yet been written.
The added requirement that all casinos be newly built answers criticism from some Republican legislators, as well as state Senate President Steve Sweeney, D-Gloucester, Salem, Cumberland, who said they wanted to see jobs created.
"We're lowering the entry fee to the resort," Whelan said. "We can't ask people to build billion-dollar casinos in this economy."
In May, developer Curtis Bashaw expressed interest in adding casino gaming at the Chelsea Hotel after a Senate committee approved Whelan's initial legislation. But the revised bill excludes existing hotels, including the Chelsea, from pursuing casino licenses.
Whelan's bill has also caught the attention of Hard Rock International, which this spring announced tentatives plans to build a $300 million casino at the city's Route 40 entryway in the style of the company's music-themed eateries. The casino would be financed by the asset management firm Och-Ziff, which owns the development site as part of an investment group that includes Bashaw.
Assemblymen John Burzichelli, D-Gloucester, Salem, Cumberland, and John Amodeo, R-Atlantic, expressed support for the bill receiving a swift reading in the Assembly chamber.
In May, Joe Corbo, then-president of the Casino Association of New Jersey, asked Whelan to cut the number of proposed new boutique casinos to less than the proposed four.
Under the amendments, that number now been reduced to two casinos. Whelan wants them to be next to the Boardwalk and wants at least one of the two properties to commit to expanding to 500 rooms over time.
The bill ensures that the new smaller gaming venues would also bank at least 5 percent of their gross revenue annually in a fund managed by the state Treasury. That money could be used for the casino's own expansion. Under Whelan's amendments, a small-scale casino that fails to expand after five years would pay an additional 5 percent, and that money could be used by the city and other casinos for infrastructure and upgrade improvements.
The new draft of the bill specifies for the first time that the money must be spent within what Whelan terms the "Boardwalk casino zone."
Gov. Chris Christie announced in July that he would create a state-run "tourism district," covering the casinos, Boardwalk and marina.
Whelan said Tuesday that his new bill "is a complement to what the governor is doing."
He added that the money might end up being used by the district's leading entity, a private-public partnership, to pay for key services in the area. "Maybe that could be done by consensus," he said. "But the district doesn't exist yet."
Contact Juliet Fletcher:
609-292-4935
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