Atlantic City casinos: Storied past, grim future

Atlantic City High School juniors converse at the beach with casino views behind them in Atlantic City, New Jersey on September 11, 2014. Trump Plaza Hotel and Casino (far left high rise) will shutter its doors September 16. (Mark Makela/McClatchy)
Atlantic City High School juniors converse at the beach with casino views behind them in Atlantic City, New Jersey on September 11, 2014. Trump Plaza Hotel and Casino (far left high rise) will shutter its doors September 16. (Mark Makela/McClatchy) McClatchy

Sakia Hall lost her $9-an-hour overnight housekeeping job at the Revel hotel and casino weeks ago, but she still cries about it. The single mother of a 12-year-old who also cares for a grown cousin is one of about 8,000 workers laid off here this year.

Forget about another casino job. Four casinos have closed this year in this New Jersey beach town and another may not be far behind. Hall, 33, was “working poor.” Now she’s just flat out desperate and poor in a city whose 12 percent jobless rate was about twice the national average even before the mass layoffs.

“It’s already hard if you are working for $9 an hour to pay $1,150 rent, and electric bills and stuff like that,” said Hall, who works two and sometimes three jobs to survive. “After six months, if you haven’t found a job, you’re out of luck, you’re homeless. A lot of people’s parents is losing their jobs.”

Hall is a face behind the implosion of this famed gambling city, and the plight of thousands like her offers a cautionary tale for states across the nation debating casino gaming or having recently authorized it.

Maryland, Pennsylvania, West Virginia, New York, Ohio and Massachusetts have all added or are adding casinos, even as iconic Atlantic City casinos shrunk toward this year’s wave of bankruptcies.

Atlantic City’s woes matter because its history is woven into our national fabric. In was known as America’s Playground in the 1930s. The Miss America Pageant formally began there in 1940. The popular board game Monopoly, originally a tool to teach economics, is set in Atlantic City with its famous street names such as Atlantic Avenue.

More recently, the hit HBO show “Boardwalk Empire,” in its fifth and final season, depicts the grit of the storied New Jersey shore community, through the tale of a prohibition-era, pre-casino mob boss.

Casinos opened in Atlantic City in 1977 to predictions of coming wealth and jobs. Yet the city ranks near the bottom of virtually every social and economic indicator and now faces a threat to its national relevance.

“When you bet the whole farm on gambling . . . it’s not an industry that grows the economy. It’s an industry that sucks money out of the economy,” said Paul Davies, a senior fellow for the New York-based Institute for Family Values, a non-government organization that opposes closing state budget shortfalls through gambling. “It’s sort of like a roach motel _ takes your money and sends you on your way.”

Thirty-seven years after the inception of casino gambling, Atlantic City has become synonymous with economic and political rot.

“Casino living was easy. They paid the taxes, they created the jobs. . . . What else does a guy want?” Mayor Don Guardian asked during an interview atop City Hall. “We fell asleep. We stopped marketing ourselves. . . . If our brand got burned around the edges, we need to polish it. We got rusty.”

That’s frank talk from a man who just took office in January, the month the casino collapse began.

“When I came in, I talked about being here to transition the city, not knowing that any casinos were going to close _ suspecting that we might lose either Trump Plaza or Atlantic Club in 2015 or 2016,” he said. “Certainly not this year, and certainly not the other (casinos).”

An estimated 8,000 people working in Atlantic City have lost their jobs at the four casino facilities that closed: the Atlantic Club, the Showboat, Revel and on Tuesday the Trump Plaza Hotel & Casino. To make matters worse, owners of the Trump Taj Mahal, who also shuttered the Trump Plaza, have said they may close the Taj in November.

“It’s just going to be more grim. I don’t see any way out of this situation,” said Shohini Chowdury, an economist with Moody’s Analytics in West Chester, Pa., who expects the city’s municipal bonds, already considered to be high-risk junk bonds by several ratings agencies, to be further downgraded. “It’s just really bad. . . . Five (casinos) in one year.”

One symbol of rot is the stark contrast of severe poverty within blocks of the lavish hotels with casinos. Rundown homes in drug-plagued neighborhoods are a stone’s throw from the $2.1 billion glass-and-glitz Revel, which opened in April 2012 and shuttered in early September.

“Of all the places that I’ve traveled in the world, and casinos, nothing has ever been like Revel, it was the biggest heartbreak of my life,” gushed Jeffrey Ortiz, a gambler from Dover, Del., who, accompanied by his wife, Philomena, walked the boardwalk at night in a spiffy powder-blue suit and shiny white shoes that remind of a past era. “I’ve never seen a hotel like that, ever.”

Ortiz has come to Atlantic City to gamble for years, fell in love with Revel and like many seemed to accept the nearby blight as just part of the scenery.

“In Atlantic City, there will always be this side and the other side of Pacific Avenue,” Ortiz said. “That’s inevitable. It’s a fact of life.”

It wasn’t supposed to be a fact of life, however.

Casino gambling was supposed to bring jobs and prosperity to both sides of Pacific Avenue. But on the “other side” of Pacific Avenue, poor residents, mostly African-American, stare nightly at the sparkle and opulence of lit-up casinos. To many of them, the wave of casino closures reminds of another storied American city in ruin.

“It looks like it’s turning into the next Detroit,” sighed a red-eyed Brandon Charleston, 34, slumped on wooden steps that led to the upper floor of a rundown two-story building in the shadows of the Revel and the Trump Taj Mahal. “That’s what losing casinos in Atlantic City is. It’s basically bankrupted our city.”

Fernando Mangual, 38, sips an after-work beer from a brown bag along a tattered bulkhead that once was part of Atlantic City’s boardwalk. He works, for now, at a company that supplies local hotels, and his meager earnings help split a $750 monthly rent with his stepfather. He fears social unrest is coming, and he wants to move back to Texas but must wait for his daughter to graduate high school next spring.

“I think a lot of people are thinking, ‘Sell drugs.’ That is the wrong choice, I think, for me,” he said. “They need money to live and pay bills. I think about me, I’ll move on.”

One of the few nice homes in the poor neighborhood belongs to Tony Dabney, 54, a lifelong Atlantic City resident. He lost his information technology job at Trump Marina four years ago when it fell on hard times and was sold, but he landed similar work with the city government. He knows that the plunge in casino revenue may soon mean mass layoffs of government employees.

“They’ve raised my taxes. Now they are talking about layoffs. Everybody is afraid. The police, the fire department. Nobody’s safe,” said Dabney, blaming city and state officials for failing to diversify beyond gaming and critical of Gov. Chris Christie. “He’s at every other shore town in Jersey but he’s never come here.”

Christie actually has come to Atlantic City, but not for the high-profile town meetings and neighborhood walks like he’s done in other shore towns hurt by the devastating 2012 superstorm Sandy.

The Republican governor of New Jersey has presidential ambitions, and what happens in Atlantic City on his watch will be 2016 campaign fodder.

Christie made a name as a U.S. attorney for New Jersey, prosecuting corruption across the state and in Atlantic City. As governor he was intimately involved in finding financing for Revel when it ran into problems during the construction phase, and offered tax incentives. Its closure calls his efforts into question.

The governor held a closed-door business summit in Atlantic City last week, with city officials, union leaders and casino owners asking for a plan of action in October.

“There was a real sense of urgency about making decisions. People are engaged in this seriously,” said Bob McDevitt, president of Local 54 UNITE-HERE, the largest union for casino workers in Atlantic City. “People in the room were high enough on the food chain that everyone in the room could make a decision for the people they represent. . . . That’s the first time I know of that that’s actually happened.”

Left out of those talks, however, were community leaders such as Pastor Collins A. Days Sr., who leads the Second Baptist Church, located a few blocks from City Hall.

“You’ve got a poor community, a marginal community. When this happens, no one is concerned about the community itself,” said Days, who is working on a number of initiatives to pitch at Christie for non-casino business in Atlantic City.

For some members of his congregation, warned Days, the mass layoffs could be a mental-health tipping point. The latest problems come after years of chronically high unemployment and superstorm Sandy, which in October 2012 flooded a large part of Atlantic City.

“Many people lost everything they had . . . 75 percent of the people had no (flood) insurance,” said Days, who sits on a board in charge of rebuilding the flooded areas. “After two years, we’re still recovering. We just completed our 100th home, but there are still 60 people in the pipeline. Then on top of that you have all these people losing their jobs.”

Community activist Kaleem Shabazz grew up in Atlantic City and doesn’t remember a worse local economy.

“I don’t think there’s been this kind of unemployment or economic weakness since before gambling,” said Shabazz, president of Masjid Muhammad, South Jersey’s oldest Islamic institution. “Tourism always drove it. . . . You had four months to hurry and eight months to worry.”

Shabazz was disappointed at the lack of outreach from elected leaders as casinos closed in domino fashion this year.

“We’re at a very critical turning point for Atlantic City. Either we are going to get more inclusive in decision making . . . or we’re not going to make it as a viable city,” he said.

Mayor Guardian remains optimistic, working to bring an Atlantic City campus for Stockton College, which could then feature schools such as engineering and marine biology and create an educated workforce the city presently lacks.

“It’s really about diversifying our economy. It’s about students, as they come of age, falling in love with Atlantic City and putting down roots here,” Guardian said, adding he is putting an emphasis on attracting conventions and conferences.

Today in Las Vegas, which decades ago was threatened by Atlantic City, casinos account for about 30 percent of its tourism, while conventions and conferences bring in about 70 percent.

“Gaming is not the only thing in Las Vegas,” said McDevitt, the union leader. “The only reason that percentage is the way it is is that they made a commitment a long time ago to the convention business. And our town, we didn’t. We turned our back on that business and never really took it serious.”

A beefy man with more than a century of family ties to Atlantic City, McDevitt bristles at the negative media attention.

“Enough already with that (expletive). At the end of the day, we’re still a $2.5 billion gaming market,” he said, his face turning red. “It’s not like we went from $5 billion to $2.5 billion in a year. We’ve been declining since ’06, but we’re getting to the point where it’s going to settle.”

One sign of that bottoming could be the Miss America Pageant, which returned to its Atlantic City origins after an eight-year hiatus.

“Across my travels serving as Atlantic City’s (unofficial) spokesperson . . . I can’t tell you how many people have approached me in my travels and said that Miss America is back in Atlantic City and that’s where she belongs,” Nina Davuluri, Miss America 2014, told McClatchy three days before ending her reign on Sept. 14. “And to hear that, and to speak on behalf of that, has been absolutely incredible. And that legacy is going to continue.”