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.”
He continues:
“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
ldlevenson@cooperlevenson.com
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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