Vol. 3, No. 11, November 2006
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Improving the State
Casino revenues contribute to much more than Atlantic City itself
In a previous article I discussed that our casinos have paid the staggering amount of $6.6 billion from the 8 percent tax on gross gaming revenues (GGR) since 1978. This year, our 12 casinos will pay over $1 billion in all state and local taxes, fees and obligations.
One portion of this tax revenue is the 1.25 percent of GGR that we are obligated to pay to the Casino Reinvestment Development Authority. Last year, casinos paid $65 million for use by the CRDA. As gaming revenues increase, this amount will likewise increase. Given the magnitude of the funding CRDA derives from our industry, I thought that CRDA accomplishments should be highlighted.
The New Jersey legislature created the CRDA in 1984 to facilitate the redevelopment of existing blighted areas and to address the pressing social and economic needs of Atlantic City and residents of the state. Despite all of the casino hotel investment and the creation of an exciting new skyline in Atlantic City in the late 1970s and early 1980s, other significant investment in the city was non-existent.
With its portion of casino revenues, CRDA funding became available as seed money for capital investment that generated economic development and community projects designed to respond to the changing economic and social needs of our state.
Fast forward to 2006, and our industry can be proud of the impressive CRDA projects both in our city and statewide. Many different types of projects have been the beneficiaries of CRDA financial assistance. Projects that serve pressing social and economic needs of local residents are popular favorites—for instance, day care centers, youth and senior citizen facilities, parks, medical facilities and community centers.
Other projects eligible for funds may be part of a comprehensive plan to improve blighted or redeveloped areas, or projects involving public recreation and entertainment facilities promoting the tourism industry, housing, public transportation facilities, convention centers, and manufacturing, industrial, commercial, recreational, retail or service facilities.
In Atlantic City the impact of CRDA projects is highly visible and successful. Through various programs, CRDA has been involved in funding or partially funding many significant Atlantic City projects, including:
• Atlantic City Housing—an investment of $240 million in the construction of new residential housing units resulting in an increase in Atlantic City's housing stock by 12 percent, and which has contributed to the current private housing boom in AC;
• The Boardwalk Façade Project—much needed façade improvements and other capital projects on the Boardwalk;
• The Boys and Girls Club—a new clubhouse facility;
• The Walk—a retail and restaurant district located at the Expressway corridor;
• Various Entertainment Zones—including the Quarter at Tropicana, the Pier at Ceasars, the House of Blues at Showboat, and the Borgata expansion, which have added new upscale restaurants, nightclubs, retail and other non-gaming offerings to our casinos;
• The Carnegie Library renovation;
• AC Convention Center and the Sheraton Headquarters Hotel;
• Hotel Rooms —$175 million of funding that has led to 3,500 new hotel rooms at various Atlantic City casinos.
Keep in mind that I have only highlighted a few of the CRDA projects citywide. These commercial venues entice new visitors to our city, and also supply entertainment opportunities for those of us working in the casino industry.
Another CRDA fund, the Corridor Projects Fund, has the worthwhile objective of improving the transportation infrastructure and economic development projects in the “corridor region” of Atlantic City.
Recently, under CRDA Executive Director Tom Carver’s leadership, a decision has been made for CRDA to expand its efforts to study broader regional transportation and access infrastructure issues that are needed to service our existing vibrant industry, as well as to proactively keep pace with the next wave of development that Atlantic City is poised to achieve.
While CRDA is funded by the Atlantic City casinos, it is not only local projects that receive these funds. There are separate funds for North Jersey and South Jersey, in addition to the Atlantic City Fund. Projects that have resulted from this funding include:
• The New Jersey Performing Arts Center in Newark;
• The Matriarch Center at Seabrook House;
• The Jersey City Armory; • North Ward Center in Newark;
• South Mountain Arena in West Orange;
• Raritan Valley YMCA in East Brunswick;
• Rutgers Food Innovation Research & Extension Center (FIRE) in Bridgeton; and
• Cape May Convention Center.
Our industry is justifiably proud of CRDA’s roster of projects, which is just a portion of the overall good that our industry has done for the entirety of New Jersey.
