New Jersey Senate President Stephen Sweeney said Wednesday that he envisioned creating a nonprofit board composed of top business leaders that would reinvest gaming revenue from potential casinos in North Jersey into Atlantic City.
Faced with the prospect of four Atlantic City casinos closing this year, Sweeney recently signaled an openness to casino expansion in North Jersey, possibly as soon as November 2015. Sweeney's idea is one of several being contemplated as the Shore city grapples with declining gaming revenue and worker layoffs.
Facing competition in Pennsylvania, New York, and elsewhere, Atlantic City saw gaming revenue dropped from $5.2 billion in 2006 to $2.9 billion last year.
Citing "ongoing casino revenue declines, expected near-term casino closures, and the impact of sizable casino tax appeals," Moody's Investors Service on Wednesday downgraded Atlantic City's debt to junk bond status. Its outlook remains negative. The debt rating makes it more expensive for the city to borrow money.
Expanding gaming would require the approval of voters, since the state constitution restricts casinos to Atlantic City. Sweeney said he would only support a proposal that would help the struggling resort.
That would likely mean part of the revenue generated by casinos up north would go back to Atlantic City, and the board would determine how to use it.
The proposed board would include "business people that know how to make business happen, not government," Sweeney said during an hour-long interview Wednesday with the Inquirer Editorial Board.
He said he was not aware of a model for such a board and emphasized that nothing had been finalized. Possible investments include repurposing the casino buildings or knocking them down to bring new businesses in, he said.
"I just don't want to give money to government, because I know what they do with it," said Sweeney, a Democrat from Gloucester County. "They make government bigger."
He praised Atlantic City's new mayor, Republican Don Guardian, as a strong "cheerleader" for the resort. Sweeney said he and Gov. Christie had agreed before November's election that the state would take over Atlantic City if Mayor Lorenzo Langford, a Democrat, had won another term.
"We couldn't allow the city to continue going in the direction it was going," Sweeney said.
Christie's office declined to comment.
Echoing Sweeney, Christie told reporters in Keansburg, N.J., this month that "any expansion of gaming to other parts of the state would have to have, as an element to that plan, how that gaming will help the folks in Atlantic City."
The city is likely to lose thousands of jobs by the end of the summer. Trump Plaza issued layoff notices this month and said it would close by mid-September.
Revel and Showboat also have threatened to close if they do not find a buyer soon, while Atlantic Club was shuttered in January. The four casinos have employed a total of 8,900 workers, nearly a third of the city's workforce.
At a news briefing in front of the construction site for the Bass Pro Shops outlet, Guardian said Wednesday that he was hopeful the casino properties would find buyers. He said there were a "half-dozen" companies looking at Revel. The owner of the former Atlantic Club also is discussing a sale, he said, possibly to Richard Stockton College, which wants to open an Atlantic City campus. Showboat also has had inquiries.
Officials are exploring whether the Casino Control Commission has the authority to compel the companies to remain open longer than 60 days. The commission is investigating, but has indicated that is not likely.
Guardian said job training would be available for unemployed workers, and he expected current projects in town to produce about 1,000 new jobs in the next year.
Asked how government could address the immediate job losses, Sweeney said: "With the shrinkage, obviously, some of the houses will do better because there'll be less competition. They'll hire some people. The short term is dealing with the pain we're going to experience.
"Gaming's been cannibalized," Sweeney said, but he said he still believes the city can reinvent itself. Instead of being a "casino town with a beach," Sweeney said, "what we really want Atlantic City to be known as is a resort town with casinos."
It remains unclear how that might happen.
"That ship has sailed," said Jim Diffley, senior director for U.S. regional economics at IHS, an economic consulting and forecasting firm.
State Sen. Raymond J. Lesniak (D., Union), who has long pushed for expanding gaming, has said casinos in North Jersey could dedicate $100 million in revenue a year for 10 years to Atlantic City. Sweeney indicated that wasn't enough. "Absolutely not," he said.
He declined to provide his own estimate.
"It's really simple. Is it a 50 percent tax on the casino in North Jersey, where half of the money comes to Atlantic City, and the other half stays there?"
In Atlantic City, officials are less sanguine about the possibility of North Jersey gaming, but seem to think it's inevitable.
"Personally, I'd love to not have this conversation," said State Sen. Jim Whelan, a former Atlantic City mayor. "Can I support something that is a hypothetical? I don't know. I don't sign blank checks."