ATLANTIC CITY - They are still dancing in Atlantic City. In a summer of bad news along casino row, Phyllis Papa, founder, choreographer, and director of the 32-year-old Atlantic City Ballet, has found her place on the Boardwalk for the first time. Long headquartered outside of the city, the company has settled into its new home at Boardwalk Hall, with all the dancers living close by in two big houses. The company will dance regularly at the Claridge, on the Boardwalk at Kennedy Plaza, and in a series of "Up Close and Personal" performances inside its new ballet studio in Room 311 at Boardwalk Hall. It will even coax a new winter tradition from the summer resort by bringing its Nutcracker to Atlantic City the week before Christmas.

Question: After three decades, are people still surprised to hear that there is an Atlantic City Ballet?

Papa: You know, I get that all the time. We've been here for 32 years in and out of the city and all around the area, and it's just amazing that people still say, "Oh! I didn't know we had a ballet company here," and they're pleasantly surprised. Every real city has a ballet company. Luckily, now that we're able to perform in the city and we're here in the city regularly, we're going to start developing this audience.

Q: How is Boardwalk Hall going?

Papa: It's fabulous. The CRDA [Casino Reinvestment Development Authority] gave us the money to have a studio here. In the past, we started rehearsing here on and off. . . . I kept walking through the building saying there are so many beautiful rooms, all the arts could be right here in this building. We got 311 and 312. It was a room that had no windows, but big enough for a ballet company. We had to spring the floor. On top of that floor is laid a "marley" so dancers can dance on pointe. We have mirrors and an office. Steve Ball, the Boardwalk Hall organist, has been giving me a lot of advice. They even have a costume room here in the building. You know I have my eye on that room.

Q: How do the dancers like it?

Papa: They love it. They love the floor. They love being in the city. They moved into the city, too. They just walk down the Boardwalk to go to work. We have two houses we're renting.

Q: It's what people want to happen to the entire city, bringing in artists, dancers.

Papa: Exactly. Mississippi Avenue was supposed to be the arts district. And it is still programmed for that with Dante Hall and the Arts Garage. I was hoping the dancers could live on that street, so that you would see the dancers walking up and down the street and make it really an arts district. But that didn't work out quite like that. They're going to have to walk down the Boardwalk instead. . . . I keep telling them there are all kinds of things here: There's a buffet where you get all you can eat for $3.99. Not that they eat.

Q: How long is the season?

Papa: Most ballet companies start in September and finish in March or April. About two years ago, I said that doesn't work in this town. We're a summer town. This year, because we did get the Claridge, and we are performing every month with a different show, we will be a year-round dance company. That's almost unheard of.

Q: Being in Boardwalk Hall, have you had any encounters with Miss America, perhaps with the ghosts of past Miss America lyrical dance routines?

Papa: One of the girls who was Miss New Jersey was my student. Jennifer Farrell. She's from Margate.

Q: Have any of your dancers moved into casino work, become showgirls?

Papa: Actually, I have a boy who was an apprentice to my very first company. He's now 52. He had been dancing in Atlantic City in the Legends show.

I had a couple of girls as showgirls after they did ballet. I have one in Vegas as a showgirl.

Q: Describe the company.

Papa: The dancers come from Asia, Europe, South America, all over. I have two Kristapses: Kikulis and Lintins, both from Latvia. When I do the demonstrations, at the end, I have the dancers say their names and where they are from. And they say, in unison, "Kristaps! From Latvia!"

All of the dancers are classically trained. However, my choreography involves jazz, modern ethnic dance. I mix it in with the ballet. My Dracula - if someone's never seen Dracula before or a ballet - this is the perfect thing to come and see. It's not what you think.

Q: How did you get this gig?

Papa: I was asked to come here. Resorts had seen me in a performance. They had no art here. They asked if I'd be interested in starting a company in Atlantic City. I had gotten a $150,000 grant to come here with dancers. It was me and 11 other dancers. The first performances were in Resorts.

Q: You've survived longer than some of the casinos.

Papa: You might say that. It's been hard, at times, extremely difficult trying to get funding.

Q: Do the casinos send people over?

Papa: Definitely. We're trying to get the casinos to get their people who love the ballet to come and see the ballet. It's another alternative to having a great city. Not everyone wants to gamble. We have to make this city so they can go shopping, have lunch, go to the ballet, to a museum. They can go to the Art Garage. And we have the best restaurants.

Q: Some of the art projects seem to catch on and some of them don't.

Papa: It's going to happen. It's turning already. With our new mayor, how can it not happen?

Q: With the news this summer about Showboat and the Revel possibly closing, people feel that the city is in free fall.

Papa: No. I think it's going to come right around back. If we all do our part, Atlantic City will pop back.