Atlantic City casinos move forward with expansions

John Curran

Thursday, Feb. 28, 2002 | 9:18 a.m.

ATLANTIC CITY -- With gamblers returning to the slot machines and capital markets stabilizing, Atlantic City casinos are forging ahead with expansions, some of which were postponed in the wake of the Sept. 11 terrorist attacks.

Resorts Atlantic City officials told casino regulators Wednesday they will raze and replace a 166-room hotel tower in a $125 million expansion to begin this summer.

The casino, which was bought last April by Colony Capital LLC, will knock down its North Tower and build a 28-story tower with 459 rooms in its place, Resorts Vice Chairman Nicholas L. Ribis told the state Casino Control Commission.

The project was announced last year but was delayed after the city suffered a dramatic decline in visitors after the attacks.

"We didn't know where the world was going at that point, and there was no business basis to go forward," Ribis said.

Other casinos are proceeding with expansion plans, too:

--Next week, Showboat Casino-Hotel plans to break ground on a $90 million, 544-room hotel tower.

--Tropicana Casino and Resort will start work May 1 on a $225 million expansion, which will add 502 rooms, restaurants, shops, parking and entertainment venues. Joseph Cole, a spokesman for parent company Aztar Corp. in Phoenix said the groundbreaking was delayed for reasons unrelated to Sept. 11

--Park Place Entertainment Corp. of Las Vegas recently began construction of a $28 million structure linking Bally's Atlantic City with the Claridge Casino Hotel, another project held up amid uncertainty after the attacks.

The moves were welcome news to commission officials.

"In the immediate aftermath of those attacks, there was grave concern that Atlantic City's casinos would be seriously impacted," said James Hurley, chairman of the casino commission. "The decision by Resorts and Colony to revive this project is a clear indication of the confidence that they have in the future of the industry here."

Ribis said Atlantic City demonstrated its long-term viability by bouncing back from the post-attacks doldrums.

Within two years, roughly 3,000 new hotel rooms will be built by Atlantic City casinos, drawing in new business and increasing casino revenue -- and profits.

"I think Atlantic City is the most resilient gaming jurisdiction in the United States," Ribis told the commission. "As the product continues to grow, you'll have more and new customers. That's what I've seen over the years."

Ironically, Resorts will lose rooms temporarily to make room for new ones. By law, New Jersey casino hotels must have at least 500 rooms. But the demolition of the North Tower will leave Resorts 22 rooms shy of the minimum.

The casino commission agreed to let Resorts operate with only 478 rooms until the new tower opens in two years.

Separately, MGM MIRAGE Chairman and Chief Executive Terry Lanni told a gaming investors conference in New York Wednesday that the company planned to spend $1.3 billion on the construction of a hotel-casino in Atlantic City. The casino would be on a parcel next to the $1 billion Borgata, a joint venture between Boyd Gaming Corp. and MGM MIRAGE set to open in 2003.

Lanni did not indicate when the second resort would open, saying the company has "a number of designs we're working on."