ATTORNEY AT LARGE: Atlantic City's Unfolding Drama
by Lloyd Levenson
November 1, 2010
For the unfolding drama in Atlantic City — a play bill
Former New Jersey Gov. Brendan Byrne was the first governor in the nation, outside Nevada, to oversee the development of a new casino industry. He was a pioneer in every sense of that word, as was Atlantic City. Byrne was also the first governor to recognize a simple, inescapable fact regarding a robust casino industry: It is regional in nature and often requires governments at all levels to adopt new ways of thinking because the old ways simply won’t work in a new, dynamic environment.
In the 1970s, Byrne and key members of his administration floated the idea of a state-controlled government agency that would oversee critical decisions throughout the Atlantic City region. It was widely known as the proposed “superagency”.
Here is how gaming analyst and author Michael Pollock described it in his 1987 book “Hostage to Fortune: Atlantic City and Casino Gambling”:
“The superagency was envisioned as an 11-member Atlantic Regional Commission appointed by the governor. The agency would have sweeping regulatory powers over the entire Atlantic City region, with final approval on all zoning and planning decisions, and would create a pool from tax revenues of all 23 Atlantic County municipalities to finance area-wide housing construction. Throughout the county, the agency would be empowered to use eminent domain to purchase private land for the construction of low- and moderate-income housing. The superagency, which would review any proposed casino projects to determine their social impacts, could make recommendations to the Casino Control Commission. These recommendations would have to be implemented by the Casino Control Commission unless good cause could be shown for not doing so.”
We will never know what impact the superagency would have had or how Atlantic City and the region would look today under its oversight because the legislation died in committee. However, we do know that the idea never died. More than three decades later, Gov. Chris Christie is putting forth a much less ambitious plan to give the state a greater role in the development of Atlantic City. What has changed is that the idea has much more political support. This can be attributed, in part, to the fact that more private leaders and public officials recognize the need for dramatic action in a difficult competitive and economic climate. And, at the same time, government has matured.
Howard Drucks, my law partner, recently wrote a front-page article in Pollock’s newsletter, Gaming Industry Observer. Howard’s analysis is thoughtful and well-researched and needs to be read by anyone — in any gaming market — who wants some guidance from the past as to how such regional issues should be addressed. He wrote:
“Christie is prepared to reform and restructure the relevant administrative agencies. Given that legislators frequently tinker with administrative agencies in the name of greater efficiency, it would be surprising if the governor’s proposal did not encompass regulatory reform. What is more than noteworthy is Christie’s proposal to extinguish Atlantic City’s direct authority over the gaming district and the Boardwalk by creating the Atlantic City Tourism District, a state delineation congruent with the current casino areas. The ACT District would be administered by the ACT District Commission acting with a local consortium of businesses, known collectively as the Atlantic City Partnership. This public-private partnership would be charged with powers traditionally exercised by the municipal government, most saliently the power to make all decisions over land use and development, as well as the funding to implement those decisions. Needless to say, the ACP would be charged with ensuring that the ACT District would be ‘clean and safe’. By any measure, these institutional arrangements, explicitly designed to market the Atlantic City brand, do nothing less than establish a separate sovereignty within the larger municipal sovereignty.”
“There are a myriad of legal and practical details that must be addressed before the Atlantic City Partnership can begin to discharge its responsibilities: How will municipal revenues be treated? What enforcement mechanisms will be established to ensure compliance with regulatory determinations? What role, if any, will existing municipal bodies such as the zoning and planning boards play with respect to land-use decisions regarding the ACT District? What role will the municipal court play? What municipal liabilities will shift to the commission and/or the ACP because of the nature of their powers?”
Howard’s concise analysis identifies the relevant issues and precedents and provides a guidepost for elected officials in New Jersey and other states. I hope they read it in full because the decision to shift authority from the municipal to the state level should be performed with an exquisite level of caution — largely because such decisions cannot be easily undone.
Lloyd Levenson is CEO and chairman of the Casino Law Department of the Atlantic City/Las Vegas law firm Cooper Levenson (www.cooperlevenson.com). He can be reached at (609) 344-3161.
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