Slots in the swamp Casino could come to Meadowlands
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In an attempt to raise revenue for the region and ameliorate New Jersey's burgeoning debt, Manzo has raised the ante by backing a referendum that would allow the area to host casino gambling, an economic option that is currently only allowed in Atlantic City.
Manzo also wants to create conditions that would allow the introduction of slot machines at the Meadowlands Racetrack in nearby East Rutherford.
Casinos could create cash
Manzo, whose district includes all of Bayonne and parts of Jersey City, put his cards on the table when he explained his initiative and the potential benefits of bringing the gaming industry to the Meadowlands region.
"We want to go to the voters with a referendum to ratify putting casinos in the Meadowlands in the same way that it was done in Atlantic City in the 1970s," he said. "We're not changing any existing law. We're creating a new law that would amend the New Jersey constitution."
Manzo noted that the potential introduction of the gaming industry to the Meadowlands could also boost a venture that many observers see as a dice roll: the Xanadu entertainment and retail project, tentatively scheduled to open in 2008.
The controversial $2 billion development has suffered a series of setbacks, including construction delays, cost overruns, lawsuits, and severe financial problems suffered by the original developer, the Mills Corp.
The project is now under the guidance of Colony Capital, a Los Angeles-based investment firm, which obtained control of the development in November 2006. The deal was approved by the New Jersey Sports and Exposition Authority (NJSEA), which oversees the Meadowlands sports complex.
"This plan jumpstarts Xanadu and potentially saves it from the scrap heap," Manzo said. "The economy has turned a little bit, and there doesn't seem to be the incentive to invest the revenue needed to get Xanadu up and running. A casino would generate immense pressure to get Xanadu off the ground, because Xanadu's investors and builders would want to get it going by the time the casino gets there."
Manzo's plan includes the construction of only one casino, with the number of slot machines to be determined by population and other economic factors. Manzo also hopes to tax Meadowlands gambling profits by 50 percent, with the accumulated revenue to be used to help pay off New Jersey's debt, estimated to be as high as $100 billion.
Better than selling roads
Manzo believes his idea is better than other ideas recently introduced to tackle the deficit, including the proposed privatization of the New Jersey Turnpike.
"When you sell state roads, there is a consequence," he said. "Now that Indiana has privatized its toll roads, the toll rates are going to rise 70 percent through 2011. Meanwhile, the roadway conditions in Indiana have seriously deteriorated since privatization. The hundreds of millions of dollars that casinos could generate for New Jersey would pay down the debt, which would then make funds available for needed social programs for the elderly and for children."
Some critics of Manzo's plan maintain that it would harm the gaming business in Atlantic City, which is already facing serious challenges from new casinos and slot machines in nearby Pennsylvania, Connecticut and upstate New York.
However, Manzo stated that his plan could actually wind up helping southern New Jersey's gambling Mecca.
"Atlantic City has lost a lot of north Jersey clientele lately," he said. "But in Nevada, Reno and Las Vegas have enhanced each other's situation. When you go to Reno, you see advertisements for a different type of gambling atmosphere in Las Vegas, and vice versa. The same thing could happen here. The Meadowlands and Atlantic City could actually complement each other and reinforce New Jersey's position as the number two gambling spot in the United States."
Manzo noted that he is ready to sit down with Atlantic City officials to make a casino deal that would leave both parties with a full house.
"We are scheduling meetings with the Casino Association of New Jersey (an Atlantic City-based gaming industry trade group that represents 9 out of 11 Atlantic City casinos) and South Jersey legislators over their concerns about our proposal," he said. "I'm not adverse to making sure a significant percentage of our profits goes to continued urban redevelopment in Atlantic City. We hope to get this on the November 2007 ballot, so it would have to pass in the state legislature by June."
Concerns of competing Chambers of Commerce
One of the officials that Manzo is likely to woo is Jeffrey Vasser, executive director of the Atlantic City Convention and Visitors Authority. Vasser considered Manzo's Meadowlands casino concept with an open mind.
"I haven't seen what Assemblyman Manzo has proposed, but at the end of the day, it's Governor Corzine's call," he said. "He's studying the impact of video lottery terminals [or VLTs, which are similar to slot machines], and he has been committed to the success of Atlantic City. He is certainly not going to sign off on anything that's going to hurt the investment that's been made here."
Vasser noted that Atlantic City and the gaming industry as a whole has to reinvest in itself by reconsidering what it takes to succeed.
"If somebody simply wants to pull a lever on a slot machine, they aren't going to have to go very far from home in the very near future," he said. "We need to give people a compelling reason to come to Atlantic City, and it's no longer our slot machines. It's going to be our entertainment, dining, nightlife, beach, golf courses, Boardwalk and other full service destination non-gaming amenities that are going to make the difference."
Vasser added that along with the new rebranding of Atlantic City, redevelopment will continue.
"In the past 10 years, about a third of the housing stock in the city has been replaced, led by the efforts of the state Casino Reinvestment Development Authority (which is funded by a tax of casino earnings). The CRDA has also committed over $100 million to fixing up all of the facades along the Boardwalk. Many people come to Atlantic City with old and negative perceptions of the place, and we're going to convert them into regular customers when they see what's taking place. Our business has seen a dip in the last couple of months, but in the long term we are going to be fine."
Up the Garden State Parkway in north Jersey, Jim Kirkos, president of the Meadowlands Regional Chamber of Commerce, had a cautious assessment of Manzo's proposal.
"I am very much in favor of slot machines at the Meadowlands, but I haven't yet assessed the impact of a casino," he said. "My initial reaction is that I'm more supportive of slot machines and VLT's being placed at the Meadowlands racetrack because it would be complimentary to existing investment."
When asked how much the fortunes of a casino would be intertwined with the future of the Xanadu project and the Continental sports arena, Kirkos said, "I believe that Xanadu and the arena are perfectly complementary. A casino may draw a totally different crowd, as opposed to a complementary crowd. But knowing the casino industry and their opposition to even slot machines or VLT's at the racetrack, I think that there could be a big fight over this. We probably have a better chance at getting slot machines or VLT's rather than a single full-fledged casino, which could seriously help the racetrack. We have to look at the proposal further before we come to any conclusions."
Mark J. Bonamo can be reached at mbonamo@hudsonreporter.com.
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