College to Replace Casino as Leaders Push For Brunswick-Style Redevelopment in Atlantic City

ATLANTIC CITY, NJ—A committee created by Governor Chris Christie to explore ways to revitalize the struggling economy of this city has recommended the creation of a private non-profit development corporation similar to the New Brunswick Development Corporation (DEVCO).

The Governor’s Advisory Committee on New Jersey Gaming, Sports, and Entertainment has proposed the creation of “ACDevCo,” to “plan, finance and develop mixed-use redevelopment projects by initiating public-private partnerships to address critical public policy goals.”

“The success of New Brunswick Development Corporation has proven the concept,” reads the report from the four-member committee, which includes the current President of DEVCO, Chris Paladino.

“ACDevCo would also function as a Land Bank, acquiring certain blighted properties and demolishing existing structures. These parcels could then be sold to approved developers as the market strengthens with the proceeds reinvested in Atlantic City.”

The new company could demolish “certain failed casinos” in order to create parks and open space, increasing access to the world’s longest Boardwalk.

The governor’s panel noted the decline in casino revenue and criticized Atlantic City’s municipal spending growth.

The Atlantic City Alliance had made people aware of Atlantic City through its marketing, but its efforts have fallen short of saving the city, failing to resolve structural issues, the commission claimed.

The casino industry in town also had a Casino Reinvestment Development Authority, which distributes funds gathered through an Investment Alternative Tax to projects in and out of Atlantic City.

The governor’s commission recommended diverting those funds into starting the ACDevco company.

The committee also recommended targeting spending, stabilizing the tax base, reforming the schools by increasing state aid while cutting operating costs, slashing pensions (or at least delaying them), and having a regional jurisdiction take over some of Atlantic City’s municipal functions.

SOME ABANDONED CASINOS COULD BECOME COLLEGES

The report comes in the wake of the closure of four casinos, the Atlantic Club, the Revel, the Trump Plaza, and the Showboat, all of which are along the boardwalk.

A fifth casino, the Trump Taj Mahal, was scheduled to close December 12, but the closing has been delayed while talks continue.

The committee indicated it was recommending the creation of the development corporation because the current redevelopment organizations and methods in Atlantic City were proving inadequate.

But a “Devco” likely won’t be the only thing New Brunswick and Atlantic City have in common.  A key part of what makes New Brunswick unique is the presence of Rutgers University, a major institution that brings thousands of students, faculty, staff, and visitors to the city every day.

Richard Stockton College, located in Pomona,  announced it has bought the abandoned Showboat Casino for $18 million in order to create a satellite campus in Atlantic City.

Meanwhile, the abandoned Revel casino, a $2.4 billion project that was propped up with $260 million in state funds authorized by Christie, closed after being open for less than three years.

That casino was auctioned off earlier this year, but the winning bidder backed out, making it possible that that Revel, too, could become an institution of higher education.

The second-highest bidder, Florida-based real estate developer Glenn Straub, told Reuters he wanted to build a university there, but described the ideal student for the proposed university in an archaic and racially insensitive manner.

Straub told the news service his ideal student would be, “free, white and over 21,” an archaic expression for someone without financial obligations, presumably a well-to-do student.

While it remains to be seen how successful a college campus in a former casino might be, Straub and others agree: “Another casino in Atlantic City is not the answer.”

But the similarities between New Brunswick and Atlantic City don’t end there.  A Brunswick-based developer and a popular Hub City restaurant are among the familiar names that have also set their sights on AC.

As we reported earlier this year, another major developer based in New Brunswick, Boraie Development, is also joining the mix.  The company has promised to start work this year on its first project in South Jersey, a 250-unit apartment complex near the abandoned Revel.

Meanwhile, the owners of Destination Dogs, a restaurant in downtown New Brunswick featured on TV and in the New York Times, have already opened up a spot in AC known as “Perfectly Innocent Amusement Co.”

A TALE OF TWO STRUGGLING CITIES

New Brunswick sprouted its own Devco, which describes itself as a “private nonprofit urban real estate development company,” in the 1970’s, as the city’s industrial base was dwindling and wealthy residents were leaving for the booming suburbs.

Atlantic City sufferred a similar fate, though for different reasons.  Historically a major tourist destination for people living in the region, that city found it hard to keep up with places like California and Florida once commercial air travel became common.

In 1976, New Jersey voters approved a ballot referendum that legalized gambling, but only in Atlantic City.  Local and state leaders hoped the new industry would once again make the unique city on the Jersey Shore a leading tourist destination.

Meanwhile, New Brunswick was struggling to keep one of its major institutions from leaving town.

Johnson and Johnson, like so many other companies in that era, threatened to leave its home city for the suburbs.  But the company’s board narrowly decided to build a new headquarters in New Brunswick, on certain conditions, including the extension of Route 18.

As such, Rutgers University, Johnson and Johnson, City Hall, and the New Jersey Economic Development Authority came together to found DEVCO, with the mission of redeveloping the city’s downtown through removal of “blighted and dangerous” areas and the construction of new buildings.

Over the next twenty years, a large swath of downtown met the wrecking ball.  Streets, homes, and businesses were removed, allowing Johnson and Johnson developed a massive world headquarters on what was once the site of eleven city blocks.

The historic neighborhood on the other side of Albany Street was razed as well, as the administration of President Ronald Reagan gave millions to build the Hyatt Regency Hotel across from J&J.

DEVCO has since gone on to build many large developments including another luxury hotel and conference center, police stations and courthouses, schools, a new county government building, a Rutgers dormitory, a mixed-use skyscraper that is the tallest in the city.

The non-profit is now in the process of giving the Rutgers University College Avenue Campus an overhaul, a project with a nine-figure price tag.

Conversely, Atlantic City’s strategy of legalized gambling has been faltering, thanks in part to gambling competition from elsewhere. Pennsylvania, New York, and Connecticut now have casinos of their own, drawing people that would have otherwise gone to Atlantic City.

COMMUNITY DEVELOPMENT CORPORATIONS NOT A NEW CONCEPT

Non-profit corporations like DEVCO, often referred to as “community development corporations” (CDC’s) have been around since at least the 1960s, if not even earlier. They arose out of a combination of two separate movements.

One of them was the settlement house movement of the late Victorian era, in which private charities considered ways to make lower-class communities better places to live.

The other was the for-profit real estate industry, which grew along with immigration and the rapid spread of people across the continent.

Cities would sometimes come before other land development, and places, such as Pittsburgh, were founded in order to open up new parts of the country to European settlers. 

In many Victorian cases, someone would buy up a large chunk of land, lay out streets in a grid pattern, subdivide the land, and sell it to other people, who would engage in real estate settlement and development (and/or speculation) themselves.

At the time, landowners and developers hired the construction workers themselves and built their own real estate. Today, this job is often outsourced to construction companies.

The federal government granted land to railroads, which often served as real estate development companies.

The settlement houses came into the picture because one of the major drivers of this growth of cities – industry – was also a source of massive poverty, which, in turn, led to the emergence of massive slums.

The settlement-house movement began in smog-choked Victorian London, and the settlement houses there served as community centers. They served food, housed people, and offerred education, sometimes up to the college level.

The houses were funded by private donors, often wealthy ones, and some were staffed by academics.

Americans came back from travels to England with ideas of starting their own “settlement houses,” the point being to get the poor out of poverty.

Not wanting to see the firmly-embedded class system of Europe take root in America, American settlement houses were often hotbeds for social reform movements.

But the slums remained and grew, as an influx of poor Americans came into northern cities.  The Second World War, postwar racism, and real-estate practices combined to keep poor people and minorities in the fast-growing slums. 

During the 1960’s, most American cities experienced destructive rioting, and it was out of those experiences that the modern community development corporation was born, a hybrid of charity and commerce.

Activism played a major role, and activists produced everything from educational programs to enormous protests of proposed construction projects, as well as an approach known as community organizing.

One of the first modern community development corporations, the Bedford-Stuyvesant Restoration Corporation, was founded in 1966 by Robert F. Kennedy.

Kennedy, a Democrat, teamed a couple of Republicans, New York City Mayor John Lindsay and US Senator Jacob Javits, and got Congress to amend the Economic Opportunity Act to allow the government to aid communities in starting their own development companies.

Some aspects of Kennedy’s approach resembled DEVCO. Kennedy announced that there would be two non-profits, one headed by leaders of the community, and another run by major business executives, including the chairman of IBM and the chairman of the company today known as Citibank. 

However, Kennedy and others appear to have had second thoughts, as the business leaders were sidelined into fundraising, and community leaders were put in charge of the corporation

In 1968, people in certain parts of Pittsburgh found it difficult to get loans for housing, eventually teaming with a local bank and a foundation to launch a lending and advice program called “Neighborhood Housing Services,” focusing on home improvement loans and advice for low-income individuals.

The federal government soon took notice and created a similar venture on the national level.

After that, numerous other funding aids emerged, from the public sector and from the private sector, and plenty of CDC’s were born in the hopes of making money off of real estate and using it to improve American cities.

But some CDC’s didn’t make it.  The Codman Square CDC in Boston, for example, poured money into a recently-closed neighborhood supermarket, but their reopened store quickly closed, causing the failure of that corporation.