Vol. 4 No. 12, December 2007
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Bader Bargain
Last month, Revel Entertainment reached a development agreement with the City Council of Atlantic City. Revel officials presented an exciting design that will transform that end of the Boardwalk into something truly exciting and completely different. The soaring towers (just one to start with) will add a new dimension to the city’s skyline. The price tag on the as-yet-unnamed property—$2 billion—is indicative of how valuable gaming companies and the financial community consider Atlantic City and its market potential.
So it’s not surprising that Revel (and Pinnacle Entertainment, which is spending nearly as much on a project on the old Sands site) was concerned with the talk about development of Bader Field, those valuable 140 acres at the entrance to the city. When you commit to spending billions of dollars in a jurisdiction that has limited space to build, you want to make sure that your money is well-spent and that conditions will remain relatively stable for the first few years after you open the project.
Revel negotiated some very sensible conditions into its contract as it pertains to the Bader Field development. First and foremost, the company wants to make sure that all federal and state approvals are completed before any bidding begins on the parcel. These are significant issues. Bader is now considered “green space,” which requires the developer of the property to turn over to the state land of equal acreage in its natural state within the city limits. Think about it. Is there any land that would fit that bill?
Then, Revel wants the city to ensure that any traffic concerns be addressed before any development begins. The company has a valid concern that development at Bader could snarl traffic and prevent its customers from reaching their end-of-the-Boardwalk destination.
Since Bader closed in September 2006, there have been many expressions of interest in the property. Steve Wynn and his company, Wynn Resorts, has eyed the land. Members of the Mohegan Gaming Authority in Connecticut visited the resort over the summer and liked what they saw. And last month, Terry Lanni and Dan Lee, leaders of MGM Mirage and Pinnacle Entertainment, respectively, both said they would also be interested in Bader, despite the fact that they are each planning massive projects in other parts of Atlantic City. And we haven’t heard from Kerzner International, Las Vegas Sands or Melco PBL, an Asian developer, who all might also be interested.
These developments have only served to convince me that Bader Field is Atlantic City’s pot of gold at the end of the rainbow. To rush into any development agreement is foolhardy. We’ve got three multibillion-dollar properties on the drawing boards. Let’s allow them to get into the ground and be almost completed before even considering a sale of Bader Field.
This will ensure the growth of Atlantic City for the next 20 years, at least. It will ensure that we create the tax revenues that will ease the burden on the Atlantic City residents. It will create tens of thousands of new jobs. It will spur a boom in the communities surrounding Atlantic City. And it will require that the state address the thorny transportation problem that will only become worse unless it is addressed soon.
Our newly elected legislators have their work cut out for them. Let’s manage the growth of Atlantic City in a rational manner—one step at a time. Revel says its project will open in late 2010. Pinnacle may be one year later. And MGM a year or two after that.
The development of Bader Field can wait. Let’s land-bank this treasure and in five or 10 years, it will be that much more valuable and that much more in demand. Then, when we do sell it, the benefits will be maximized for all the residents of Atlantic City and the entire South Jersey region.
