ATTORNEY AT LARGE: Steeling for a better future
by Lloyd Levenson
August 4, 2011
The Steel Pier in Atlantic City has a long, glorious past. Personalities ranging from Al Capone to Lou Costello played its arcade games, watched its concerts and strolled its floors. The pier may be best known for its diving horse, in which a brave equine jumped from a tall platform into a small pool of water.
That diving horse may be an appropriate metaphor for Atlantic City’s recent past. Horses no longer dive, but gaming revenues do. And so can the fortunes of a resort city on the Atlantic Ocean. But the diving horse emerged from that water to dive again. Atlantic City surely will also.
The Steel Pier, the most famous of Atlantic City’s great piers, is now on the market. The 112-year-old pier is being auctioned off, with bids to start at $2.5 million. Whoever buys that pier, at whatever price they pay, will likely do so because they see the future of Atlantic City as being better than its present. That is the nature of an investment. Never mind diving horses or gangsters who died long ago. What matters in the business world is simply this: Will this investment pay me more than I am paying for it now?
If you look at recent events in Atlantic City, the number of investors who believe in that positive proposition is growing.
The sight of Revel under construction is the brightest signal of positive growth in Atlantic City. Speaking at our East Coast Gaming Congress recently, Revel CEO Kevin DeSanctis noted that Revel is the largest ongoing private construction project in the United States.
But that is hardly the only sign of progress. Landry’s, a notable restaurant and gaming firm, is morphing the Trump Marina into the Golden Nugget, and is bringing some of its notable restaurant brands along for the ride. The Press of Atlantic City noted recently: “Advertisements are urging people to come witness the transformation – ‘Out with the old, in with the Gold.’ If the Chart House is any indication of what people can expect at Atlantic City’s Golden Nugget, the future can’t come fast enough.
“Equally casual and upscale, the Chart House is the seafood restaurant Trump Marina should have always had.”
Add to that mouth-watering description the announcement that Hard Rock is also going to build in Atlantic City, and you can see the beginnings of a recipe for significant future growth.
So why, after so many months of continuing bad news about Atlantic City, is there reason to suggest that the future looks good?
At the same East Coast Gaming Congress where Kevin DeSanctis made his remarks, a number of other facts were put forward. You may not know that many of the retail and dining outlets in Atlantic City that are part of national franchises happen to be among the best-performing facilities within their respective chains. This holds true for everything from the Palm Steak House to Morton’s to the House of Blues.
Many people are surprised that non-gaming spending is holding its own while gaming revenues are down. Surprise or not, that is a welcome trend, and it supports many of the investments being made.
I do not know what will ultimately take place on Steel Pier, or who will buy it. However, I can state this with confidence: Anyone with sufficient imagination and insight can generate a profitable return on investment in Atlantic City if they can execute their dream. Wall Street is coming around to support that idea.
The Diving Horse once made a big splash in Atlantic City. But that is nothing compared to what is likely to come.
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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