Let state develop A.C., Whelan says

With billions of dollars in casino-related projects in the works, the senator-elect from Atlantic City says it's time for the state to take over economic development from a city government that has proved to be unstable and frequently corrupt.

James Whelan, an assemblyman and former Atlantic City mayor, isn't talking about an all-inclusive, Camden-style state takeover. He says the city's services are getting delivered. Police officers are on the beat. Fires are put out.

Whelan, though, points out that three city councilmen have been convicted of taking bribes in the redevelopment of the now-closed, 148-acre Bader Airport. There are other big projects on the horizon, and he doesn't want to read about them in federal indictments.

"Atlantic City is on our third mayor in two months, two of whom were not elected," said Whelan. "We've had two city councilmen go to jail and one city councilman under house arrest. Others are awaiting legal proceedings. It's obviously the concern. People of Atlantic City deserve better."

Whelan has been lobbying the governor, the mayor and his legislative colleagues on behalf of a bill he's writing that would give the state control over city development.

Assembly Speaker Joseph Roberts (D., Camden) said Atlantic City's political instability could turn off investors and cost the city its edge as gaming grows in nearby Pennsylvania and New York.

"Clearly there has been a lack of governmental stability in Atlantic City that has shaken public confidence and begun to ring some alarm bells on the part of companies that may be investing in Atlantic City," he said.

Roberts said he supported Whelan's efforts but wasn't ready to endorse legislation until he saw it.

Gov. Corzine's spokeswoman, Lilo Stainton, said, "the governor's whole objective there is to find a way to help people stabilize the government." If there were to be a state takeover, the city would have to want it, she said.

While the Trenton crowd seems open to Whelan's idea, he is meeting resistance at home. The city's cooperation is essential because it owns the airport and controls its zoning.

"I am disappointed in Assemblyman Whelan coming out with those remarks," said City Councilman Dennis Mason, who heads council's development committees. "City Council has taken the lead on development and a lot of other things because of the Levy administration."

He was referring to the spinning door in the mayor's office. In October, former Mayor Bob Levy checked himself into a drug-rehab clinic; he later pleaded guilty to collecting more than $24,000 in false Department of Veterans Affairs benefits and quit. His departure was followed by the six-week tenure of acting Mayor William "Speedy" Marsh, the council president, who was succeeded by Mayor Scott Evans, appointed by the council Nov. 21.

Mason said that in spite of recent turbulence, Atlantic City was moving ahead. Revel Entertainment Group plans a $2 billion casino complex on the Boardwalk, and Pinnacle Entertainment plans a $1.5 billion to $2 billion project on the site of the imploded Sands Hotel Casino.

Noting that MGM-Mirage is seeking planning board approval for another $5 billion casino development in the city's Marina section, Mason said, "I don't see what the problem is."

Two mayors ago, a state agency that invests casino revenues commissioned a study that many say could set the course for developing Bader Field, the nation's first airport. They expect results in February, and a state development official said the city-owned airport could be sold next year.

Whelan's idea is to have an open process for selling the airport, which could bring in $1 billion or more, according to most estimates.

Mason asserts City Council wants a clean process open to the public as well. And he believes the land could be worth as much as $4 billion. He says residents fear the state could take control of the land, sell it, and then fill New Jersey's $3 billion budget gap, leaving little for the city.

The state's Atlantic City development official, Diane Legreide, said emphatically that proceeds from the sale would go to the city.

The second part of Whelan's argument for state control is the longstanding relationship between the state and the city. The state allowed gambling, regulates it, and takes in millions of tax dollars from it.

If the old airport were developed into a casino zone, there would have to be major highway improvements on the Atlantic City Expressway or nearby Black Horse Pike, just to get gamblers to and from the property, said Legreide, head of Atlantic City projects for the state Office of Economic Growth.

The project could require extensive environmental work as well, she said.

No one seems to know for sure what is in the airport's soil. It was built on partly filled-in marsh along the back bay during World War I, decades before tough building codes and environmental regulations were even written.

"Bader Field is a very, very valuable resource to the city but the state has an interest that it is developed in the right way," Legreide said. "The city owns Bader and certainly it will be the one who benefits from the sale of Bader. But it's got to be a state partnership."

The Bader project also raises economic issues for the casino industry. Some critics worry casinos at the airport could become a "trap" for gamblers, keeping them from circulating to the Boardwalk and Marina casinos.

Analyst Adam Steinberg, of Morgan Joseph, a New York investment banking firm, said a few casino operators in Atlantic City and elsewhere have thought about bidding on the airport.

"If you own a property that you believe is going to get impacted [by airport casinos] and can't stop it, you might as well be the one who benefits from it," he said. "There is still a lot to be said for the Atlantic City market. I think it is underpenetrated."