Nelson Johnson - Boardwalk Empire - The Birth, High Times, and Corruption of Atlantic City

There’s no reason Atlantic City can’t flourish as a community as well as a tourist destination. The two aren’t incompatible. While there were those who predicted Atlantic City would become an adult theme park with no room for families, the past decade has proven otherwise. Through the cooperation of the Casino Reinvestment Development Authority, city hall, and the casinos, many blighted areas of the city have been demolished and thousands of affordable units have been built to house local residents and casino employees. Despite the many high-paying jobs in the casino industry, the average worker earns barely $30,000 per year. If affordable housing and public transportation are available, many of those workers would choose to live in Atlantic City and their quality of life and, with them, that of the entire community and the region would be improved. Small but important steps in the right direction have already occurred. While Atlantic City as a community is a long way from being restored to the vitality it once had, tangible progress is being made. The pace may not be to everyone’s liking, but given the fact that Atlantic City had been deteriorating for nearly 40 years prior to casino gambling, it’s unrealistic to think redevelopment should be occurring more quickly.

In the past 25 years casino gambling has transformed a squalid little city on the verge of oblivion into one of the largest tourist attractions in the world. The profits, jobs, total investment, and tax revenues generated from gambling to date far exceed the early estimates of even the most optimistic proponents in 1976. While there are some original supporters who are disappointed, they should know—given the resort’s past—that nothing but the legalization of gambling would have revived this town’s fortunes. Had the ’76 Referendum been defeated, Atlantic City would have continued to deteriorate and sink further into despair. Critics of the casino industry can drive up the Garden State Parkway to Asbury Park to see what would have become of Atlantic City without gambling. It would have been a grim existence for anyone left behind. Absecon Island would have become desolate in a way its early developers could never have envisioned.

Jonathan Pitney’s beach village remains an experiment in social planning grounded in tourism. The new Atlantic City is in partnership with corporate America’s hotel and recreation investors, a fact that the residents have yet to grasp fully. Once the community and the casino industry appreciate their relationship and understand their respective roles, Atlantic City will be positioned to reach full bloom. Working together, the experiment will succeed.

AFTERWORD

Wesley Hanna had been anticipating the implosion of the Sands Casino Hotel for weeks. Eccentric but brilliant in a mix that is disarming, Wes is the type of guy to get excited contemplating the demolition of a 21-story, 500-room hotel. A recent graduate of Rutgers Law School, Wes was spending most of his waking hours serving as a law clerk to a Superior Court Judge. That brought him to Atlantic City daily, and he became mesmerized by the town’s quirkiness. Wes was taken by the contrast of the competing realities and quickly sized things up. “The city has a culture of naked reality, while the casinos are a place where reality exists under many layers of lipstick and rouge.” His instincts told him that watching the destruction of a casino hotel would be much fun. Upon learning the date for the Sands’ implosion—October 18, 2007—Wes calendared it as if he and his fiancée Patty were going to a party.

When Wes arrived at the Boardwalk that Thursday night, he was tickled by the festive atmosphere. Throngs of local residents, hotel workers, peddlers, and escapists (in other words vacationers) crowded onto the Boardwalk, all hoping to be part of a history-making event. Wes took it all in. “It was an escapist crowd but VIPs were being ushered around and street performers were out in force. A guy impersonating Frank Sinatra won the contest for eyes and tips. You could tell people were there solely for the spectacle of seeing the building come down.” It was a hodgepodge of humanity: young, old, black, white, brown, yellow, executive, and blue collar. People were dressed in everything from formal business attire to cut-off jeans. Some spectators wore face masks hawked by vendors to counter the expected dust. Everyone was enjoying themselves except Sands’ employees and loyal gamblers, who were sad to see the building go.

Pre-demolition fireworks paid for by Pinnacle Entertainment, which was to build a new mega -casino, washed the area in bright flashes of light, while a public address system blared Sinatra crooning “Bye Bye, Baby.” Shortly after 9:30 PM, Governor Jon Corzine and Pinnacle chairman Daniel Lee—who was celebrating his 51st birthday—pushed a wooden-handled plunger attached to a wire leading to the building, igniting strategically placed explosives. Seventeen deafening booms, seconds apart, followed the first explosion. Less than ten seconds after the final detonation, the massive structure groaned and began collapsing on itself. The falling concrete, steel, and glass emitted a roar, with dust floating out in all directions.

Wes’ trip to Atlantic City met his expectations in ways he hadn’t figured on. “The event had the vibe of any other casino spectacle—until it happened. When it did, there was no denying it was real. The explosions were real. The building really went down. The skyline really was different. The Sands really was no more. And a crowd accustomed to phony spectacles was genuinely stunned. Then, the people and the dust scattered—and Atlantic City went back to business.”

Business, for Pinnacle’s people, meant carting away the debris and clearing several adjoining properties. When they were done, Dan Lee and company had a total of 19 acres of oceanfront property between Indiana and Kentucky Avenues. A huge open expanse in the heart of the Boardwalk was ready for new construction. The plan was to erect a $1.5 billion Las Vegas-style, world-class hotel resort to compete with the new Borgata Hotel Casino and Spa, which had opened in Atlantic City’s marina section in 2003. Joe Weinert of the trade publication Gaming Industry Observer termed Pinnacle’s venture the “talk of the town.” He predicted that within four years the site would be transformed into “a master-planned masterpiece stretching from the Boardwalk to Pacific Avenue.” With gaming analysts pronouncing the arrival of a “building renaissance,” Atlantic City was on the march—or so everyone wanted to believe.

Not accounted for were two obstacles capable of causing the town to stumble on its grand march into the future: one looming, the second ever-present.

Within months following the Sands implosion, “Wall Street laid an egg”—so said economic historian Niall Ferguson. Much has been written, and more will be, by scholars such as Ferguson, Paul Krugman, Robert Reich, and Michael Lewis. Nothing said here can add to their insights. Suffice it to say that Atlantic City’s gaming industry—along with many others—didn’t see the burst of the credit bubble coming. The turmoil in the financial markets will hinder growth locally and may push several casino properties into bankruptcy. Many observers believe that the over-leveraging of our nation’s economy, which was many years in the making, will take as long to resolve. Welcome to the new normal. Farewell to the Pinnacle.

Ever-present, but often ignored, is the “naked reality” of just how much work remains to be done to rebuild Atlantic City. Thirty-four years after the 1976 gambling referendum much of the town looks as drab and dismal as it did before the casinos came in. For portions of the population and segments of the city, it’s as if gambling never happened.