Philadelphia developer Bart Blatstein has gotten an approval toward obtaining a casino license, with plans to make his Showboat Atlantic City hotel part of an expanded gaming complex.
The New Jersey Casino Control Commission granted Blatstein a so-called certificate of compliance at a hearing Monday, making him eligible for a full-fledged casino license.
Blatstein told commissioners at the meeting that he planned to build a casino structure on a 123,000-square-foot lot he acquired to the northeast of Showboat, which would let him circumvent a deed restriction that bars gambling in the property itself.
“The old-style casinos are no longer in vogue,” Blatstein said. “This gives me an opportunity to do something for today and tomorrow.”
Blatstein, who is known in Philadelphia for developing properties including his since-sold Piazza at Schmidts apartments in Northern Liberties, did not provide any details on the timing for his new casino project.
It would follow last year’s reopening of the former Trump Taj Mahal, reincarnated as the Hard Rock Hotel & Casino, and the former Revel, now known as the Ocean Resort Casino.
Although the Ocean Resort stumbled last year under its previous ownership, the city appears to be benefiting from the new entrants.
Atlantic City recorded $241.2 million in gaming revenue in February, up 27 percent from that month in 2018, according to the most recent data from New Jersey’s Division of Gaming Enforcement. Atlantic City tourism and employment have also been on the rise, according to the Casino Association of New Jersey.
Gaming-industry consultant Robert Ambrose said he can see the market supporting another entrant as long as it and other city businesses can draw a customer base beyond the single-minded gambler it had relied on in the past.
“Growth today has to be strategic, slow and steady in all areas, not just gaming,” said Ambrose, who also teaches casino management at Fairleigh Dickinson University in North Jersey. “As the market growth returns to what we can call a new normal for Atlantic City, there is substantial nongaming spending throughout the city happening now.”
That’s a big change from 2014, when the Showboat, Taj Mahal, and Revel were among five of Atlantic City’s 12 casinos to close amid fierce gambling competition on the East Coast, which squeezed the city’s only real industry.
Blatstein purchased the 1,331 guest-room Showboat for $23 million around then from Stockton University, which had planned to turn it into a residential Atlantic City campus.
The university’s plan was complicated when owners of what was then the Taj Mahal next door raised the legal requirement that the property be used only as a casino hotel, out of concern that the presence of underage students could be a liability. Stockton has since built the campus in another part of Atlantic City.
Blatstein told commissioners Monday that he negotiated the September 2016 dismissal of this restriction with Carl Icahn, who then controlled the Taj Mahal. In return Blatstein agreed to provide the billionaire investor with 40 guest rooms at the property “for a couple summers, if needed,” Blatstein said.
The dismissal of that restriction left in place a second, contradictory one put into place by another of Showboat’s previous owners, Caesars Entertainment Corp., that prohibited gambling in the building. With that requirement in effect, Blatstein opened the property as a hotel alone.
More recently, a Blatstein-owned fitness club called Matrxx Fitness has opened at the former casino, which has also hosted conventions such as the International Motorcycle Show and the Atlantic City Vegan Food Fest.
Blatstein said after Monday’s hearing that he planned to construct a new casino wing to the Showboat rather than attempt to negotiate an end to the remaining restriction with Caesars, which now counts Icahn as its largest shareholder, because the existing building’s former gaming space is regularly occupied by events.
He declined to share details about the size and proposed appearance of the planned new building at 160-70 S. New Jersey Ave., or how many card tables and slot machines it would accommodate.
In 2011, Blatstein purchased 400 N. Broad St., the former home of The Inquirer, with the hope of getting a Pennsylvania casino license. He did not win the casino bid and later agreed to sell the building to Philadelphia to convert into a new Police Headquarters.
During Monday’s meeting, Blatstein said he intended to concentrate on sports betting to target younger visitors than now generally frequent Atlantic City casinos.
“There hasn’t been this meld yet of sports bar [and] sports book where it’s like, ‘Oh, my god,’” he said. “So that’s what I’ll focus on.”
Blatstein said that he also sees potential to capitalize on New Jersey’s possible legalization of recreational marijuana use and that he could seek to take advantage of the site’s location in a so-called Qualified Opportunity Zone, which confers tax advantages on investors within its borders.
Blatstein bought the property where he plans the Showboat’s new gambling wing in March 2017 for $3.8 million, according to records filed with the Atlantic County Clerk’s Office.
He told commissioners that he also plans to extend the nearby Garden Pier, which he also owns, to the 600-foot length that it had been before it was damaged during Hurricane Sandy in 2012. He declined to share his ultimate plans for the pier, where the Atlantic City Historical Museum and the Atlantic City Arts Center once operated.
His Atlantic City holdings also include the former Pier Shops at Caesars, which he has renamed the Playground, as well as several properties in the Inlet section, among them a cluster of parcels between Dewey Place and Oriental Avenue, and a vacant lot beside the Flagship condo tower on Maine Avenue.
He told commissioners Monday that his approach to Atlantic City is based on his experience in Philadelphia, where he accumulated large tracts of land in blighted neighborhoods with an eye toward their rejuvenation.
“I couldn’t help but jump in when I saw Atlantic City hit bottom,” he said.