Investments to boost A.C.

November 13, 2007 7:18 AM
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It took the knowledge and foresight of Las Vegas-based gaming companies to change the direction of Atlantic City from a day-tripper locale to a casino resort destination attraction.

Boyd Gaming Corp. (BYD), in partnership with MGM MIRAGE Inc. (MGM), built the ultra-modern Borgata, with its Las-Vegas styled amenities and 800-room tower. It was so successful, that Boyd Gaming immediately began development of an adjoining property to accommodate the demand for rooms.

And it was that success that prompted hotel additions at the Tropicana Atlantic City and other properties.

But the best is yet to come, according to those who have been studying the current development plans.

Despite the recent decline in gaming revenues, three major construction behemoths are on the drawing board. The largest is the MGM MIRAGE project, a $5 billion development for the marina district next to the Borgata.

The first, however, is expected to be a $2 billion casino-resort, a property that will feature two thin towers standing perpendicular to the ocean with as many as 3,900 rooms, and, according to the press releases, "Atlantic City’s First Wedding Chapel."

That it mimics Las Vegas is understandable since its prime mover is Kevin DeSanctis, who cut his gaming teeth wearing the pinstripes of Caesars Entertainment and later MGM MIRAGE for which he developed and ran New York New York Hotel/Casino on the Las Vegas Strip. DeSanctis heads Revel Entertainment Group which is partnering with the investment firm of Morgan Stanley on the project.

Plans call for the property to be ready to open in the second half of 2010.

Soon to follow is the $1.5 billion to $2 billion project now being planned by Pinnacle Entertainment Inc.(PNK) that is expected to be ready by late 2011 or early 2012. This will be followed by the MGM MIRAGE casino/entertainment complex.

Said one city planner, "The Borgata redefined the public’s image of Atlantic City when it opened in 2003. It’s obvious that expansion will be the key to Atlantic City’s future."

Tony Rodio, general manager for the Resorts Hotel/Casino, added that his property has benefited from just 63 new rooms in the last few months.

"It goes to show the power of rooms in this market and the difference they can make in the performance of a property," he said.

Joseph Corbo, president of the Casino Association of New Jersey, noted that since 1978 when the New Jersey gaming law was passed some $12 billion have been invested in the properties.

And during the next four years, the city will be enhanced by the investment of another $9 billion.