By Matt Rooney | The Save Jersey Blog
HBO’s Boardwalk Empire will wrap up this fall, Save Jerseyans, five seasons into a series that launched with critical acclaim but is slated to end amid sober commentary concluding “it’s for the best.” The plot became tired and repetitive. The characters stop developing and evolving. And the initial thrill of its unique period-era theme failed to stand up against its contemporary artistic competition.
We can’t continue to kid ourselves where Atlantic City is concerned. Even Nucky saw the writing on the wall. Many years after the real life seaside emperor was dead and buried, the expression “too big to fail” entered America’s political lexicon during the financial crisis of 2008 as banks, large corporations and, later, car manufacturers received large taxpayer-financed bailouts because, we were told, they were “too big to fail.” Atlantic City ventures have certainly received their fair share of tax dollars, either directly or through tax breaks, over the past few decades. It didn’t work (in case you’ve been living under a rock and missed the cascade of casino closures in the news).
We’ve subsidized a bad business model with disastrous consequences. That’s not to say there aren’t positive things that can be done tomorrow. The real question: is Atlantic City now too big to save? I suspect the answer is ‘yes’ in the sense that Atlantic City, as we know it, is on its death bed. It’s never been truly “healthy” in the post-WWII era if we’re being honest; gaming was a shot of cortisone to the failing resort town’s heart and nothing more. Out-of-state competition, the legalization of online gambling and a strong Trenton Democrat push for North Jersey casinos will soon decimate any chance of A.C. reemerging as the East Coast’s premiere gambling destination.
But increased competition alone isn’t the whole story. A.C.’s problems are localized and systemic. We found out this week that Atlantic City’s tax base “is likely to shrink next year to half of what it was in 2010” according to its financial chief, falling from $20.5 billion back in 2010 to an estimated $10 billion in 2015. Lacking non-casino ratables, the city’s taxes recently spiked 29% despite spending cuts and operational changes under newly-minted Mayor Don Guardian but none of it could prevent a credit downgrade to junk bond status.
The Christie Administration recently attempted to highlight some “silver linings” including a 95% casino hotel occupancy rate in 2014, an 8.1 percent in retail sales between 2010 to 2013 and a 28% full-service restaurant sales increase. All true. Unfortunately, the host is failing far more quickly and dramatically than antibodies are capable of generating. We’re also talking about percentages here; the pie is shrinking.
Believe me, I’m not trying to play the part of Captain Obvious or Mr. Gloom and Doom, Save Jerseyans. Most of you are already well-acquainted with the breadth of the problem.
My real concern is that our politicians still haven’t come to grips with these challenges.
Governor Christie’s “summit” to discuss Atlantic City’s future is two weeks away. His party, with some notable exceptions, was fully-supportive of the ill-advised Revel tax abatement. The other party largely backed it, too, but as I mentioned a little earlier in this post, its members’ currently prefer the “abandon ship” approach in favor of casinos elsewhere in the Garden State with the tacit support of the Democrat state senator of A.C.’s legislative district. Strategy #1 clearly failed. Strategy #2 is clearly illogical – how exactly will MORE subsidized/regulated competition 2-3 hours north improve Atlantic City as an investment? Crickets…
For the summit to succeed, each and every participant needs to acknowledge that the Atlantic City of our fathers is dead and buried. Period. End of sentence. Not debatable. More taxpayer-subsidized giveaways designed to move new tenants into old buildings is, at best, an incomplete and prohibitively expensive strategy and, at worst, an affirmation of the failed business model that doomed A.C. in the first place. Direct intervention by Trenton hasn’t helped A.C. You could argue it’s been predatory.
Our Governor’s macro vision is absolutely the right one. He knows a well-balanced resort with gaming as only one facet of the total experience is the only possible reinvention path for A.C. to talk. That’s precisely why a summit resulting in nothing more than press releases and plans trumpeting public sector handouts and corporate tax breaks would rightly be dismissed as a photo op and little else.
Acceptance is the first step on the road to recovery. This situation isn’t any different.
The creative folks over at HBO will eventually cook up a worthy replacement for Boardwalk Empire. They did it after The Sopranos and they’ll do it again, and again, and again, if history is any guide, because they’re able to think outside of the box and aren’t afraid to do it, either. That’s the HBO brand. I’ll be looking for the same creative courage from our elected official class on September 8th.