For A.C, a new push for eminent domain

ATLANTIC CITY - Since this seaside resort legalized casino gambling 31 years ago, blighted neighborhoods have sat just blocks from glitzy big-money casinos.

Yesterday, several casino executives and a former mayor who is now a state lawmaker called for aggressive use of government's power of eminent domain to seize vacant buildings and land and clear the way for new development in the nation's second-largest gambling market.

At the East Coast Gaming Conference yesterday, state Sen. Jim Whelan, the former mayor, said eminent domain was the best way for Atlantic City to weather the recession.

"I strongly believe that to make Atlantic City a true destination resort, we have to talk seriously about developing the abandoned areas left between casino properties," he said. "This means using eminent domain, knocking down unsightly, abandoned buildings and finding creative solutions to attract new casino operators into the city."

Eminent domain is the government-sanctioned taking of private land for a public purpose in exchange for compensation. Its use - opponents say abuse - has become controversial in some places where property owners say government has overstepped its bounds for projects of questionable benefit.

Atlantic City's mayor, Lorenzo Langford, a Democrat like Whelan, did not immediately return a call seeking comment.

The city's gambling market is seeing a third straight year of declining revenue and is hemorrhaging jobs. It is faring worse than several regional or local casino markets around the country, due in part to the heavy corporate debt many of its casinos' parent companies carry.

Trump Entertainment Resorts, which owns three casinos here, is in bankruptcy, as is the Tropicana Casino and Resort.

The heads of two casino companies joined Whelan to say eminent domain would be the best means of clearing blight just blocks from the casinos.

Timothy Wilmott, chief operating officer of Penn National Gaming - who created a stir this spring at a gambling conference in the South when he said Atlantic City appears to be in "a death spiral" - stood by the comment. But he said it doesn't have to end badly.

"The opportunity to position Atlantic City as a first-class destination resort - the only way to get there - is using aggressive eminent domain to clean the place up," he said yesterday.

Penn abandoned plans to build casinos in Atlantic City when the recession hit.

Kevin DeSanctis, chief executive of Revel Entertainment, also called for using eminent domain. His $2 billion ocean-themed casino-hotel due to open in 2011 is the only one of four new projects to survive the recession, though even Revel had to slow construction as credit dried up.

Whelan said he made his suggestion because the severe recession combined with fierce competition from slots parlors in neighboring states and the increasing possibility that Pennsylvania and Delaware could soon offer tables games have squeezed City.

"We are in the most challenging time Atlantic City has seen since the passage of casino gambling," he said. "The idea of incremental improvement is not getting us where we need to be."

New Jersey Gov. Jon Corzine told casino executives that he will not raise the state's taxes on casinos, now among the lowest in the nation at 8 percent.

Corzine joked that he came to Atlantic City from a meeting in Washington on federal stimulus funds with a pocket full of cash that he wished he could expand even more at the roulette table.

"I just left Washington with $25 billion in my hand," said the governor, who is locked in a tough re-election fight amid severe budget shortfalls. "I wish we could put it all on red." *