On a recent Monday, Atlantic City Development Corp. President Christopher J. Paladino was having dinner at a restaurant in the city’s Chelsea neighborhood, “and I’m pleased to say that every table in the restaurant and stool at the bar was occupied,” he said. “The tempo of the area is changing and more people are coming to live here.”
When Atlantic City lost its monopoly on gaming and casinos began to close, some people were ready to write off the resort town. But today, more developers are coming in, betting that the city’s future won’t be limited to casinos.
Paladino, for example, believes he can replicate his success in New Brunswick, where the New Brunswick Development Corp. (DEVCO) has been responsible for more than $1.5 billion of high-rise buildings and other redevelopment.
“Our development plan in Atlantic City was different than the one we had for New Brunswick,” said Paladino, who’s led large-scale redevelopment programs in both locations. “The differences weren’t so much structural as they were conceptual and logistical. New Brunswick is located fairly close to several million people [in New York City]; it’s on the busiest rail corridor in the U.S., and it’s got two major teaching hospitals, a university, and the global headquarters of Johnson & Johnson.”
In contrast, Atlantic City has a history of being dependent on gaming and tourism. “But to an extent, it’s also a blank slate, with great placement right by the ocean and beachfront,” Paladino added. “The city and state governments are very supportive, and AC Devco is working with businesses like Hard Rock on job training and other local programs, which is very encouraging. I’m optimistic about Atlantic City’s long-term success.”
A cluster of redevelopment
Phase I of the $220 million Atlantic City Gateway project in the Chelsea neighborhood has been a success he said. “Stockton University’s Atlantic City campus is open, with some residential and academic buildings up, AtlantiCare’s new facilities are open, and a new South Jersey Gas headquarters is open with several hundred employees,” Paladino noted. “Several stores in the neighborhood are being renovated or opening, and in the next month or so we’ll be making an official announcement about Gateway’s $65 million Phase 2, which will be centered on a one-acre lot across from O’Donnell Memorial Park.” He declined to provide details about the new project, but did say it’ll probably break ground in September.
Atlantic City has had a “volatile” record of profitability as a gaming-centric municipality, Paladino added. “But new development, like Gateway, and improvements at the airport are game changers that will bring people to live in Atlantic City 12 months a year.” In October, Gov. Phil Murphy signed a bill to establish state tax incentives for an aviation district within a one-mile radius of the Atlantic City International Airport.
Paladino pointed to developments like the National Aviation Research and Technology Park — an industry, academic, and government collaboration based in the airport involving Stockton University and other partners — that’s focused on research, innovation, and commercialization of emerging flight technologies. “The new tech center will bring in computer scientists, engineers, mathematicians and others, helping to create an ecosystem of jobs that’s not dependent on tourism,” he said. “This all helps Atlantic City to reach the critical mass that’s necessary to succeed beyond gaming.”
Other builders have also gotten into the game, like Boraie Development LLC’s 600 North Beach. Originally dubbed The Beach at South Inlet, the recently opened $85 million luxury site includes stainless steel appliances, custom European-style cabinetry, quartz countertops and nine-to-21-foot-high ceilings.
Smaller-scale entrepreneurs, like Evan Sanchez, are also betting on the resort city. A co-founder with Zenith Shah of development group Authentic City Partners, Sanchez, Shah, and Loryn Simonsen launched the Hayday Coffee shop in August 2018, on Tennessee Avenue.
Moving beyond casinos
“There’s a general sense that this latest rebirth of Atlantic City goes beyond casinos and is going to be led from the ground up,” said Sanchez. “At Hayday Coffee [named after the 1880s Boardwalk rolling chair entrepreneur William Hayday] we know that change starts with community.”
The Hayday shop is one of the businesses transforming a former “dead zone” consisting of a three beach-block area — Tennessee Ave., St. James Place, and New York Ave. — into The Orange Loop, which he calls “the go-to district in Atlantic City, where five new, small businesses opened in a year.” The area’s moniker was inspired by the three orange properties on the Monopoly game board.
Besides Hayday, other Orange Loop additions include a not-for-profit yoga studio, The Leadership Studio; MADE Atlantic City Chocolate, a bean-to-bar chocolate shop with bar seating; Bourré, a New Orleans-inspired Cajun restaurant that also features live music, and the Tennessee Avenue Beer Hall, which offers more than 40 beers on draft, another 60-plus in bottles and cans, and “a modern American twist on juicy hamburgers and hot dogs.”
“Stockton University, the Atlantic City Airport initiatives and AC Devco have all been success stories, and Atlantic City leadership needs to build off of them,” said Michael McGuinness, CEO of the commercial real estate trade association NAIOP New Jersey. “Developers look for collaboration, and want to cut through the red tape to get things done,” he said. “Developers that haven’t committed to the city yet will look at ones that have, and will take their cue from those developers’ experiences.”
Although Atlantic City has potential, McGuinness doesn’t think its development will parallel Gold Coast cities like Hoboken or Jersey City. “The Gold Coast cities are in the shadow of Manhattan, almost like another borough,” he noted. “Atlantic City is more isolated from New York or Philadelphia. So its model is more likely to be similar to Morristown or Princeton, where you achieve critical mass through higher density in certain areas, which supports job creation and a nightlife.”
Sanchez has a track record of innovation, having been a founding member of Olo—an online and mobile ordering platform for restaurant chains — while he was still a student at Columbia University. Today he sees a connection between mega-projects like AC Gateway, which is leveraging more than $200 million of public and private capital, and the investment in the Orange Loop businesses which he said has totaled about $5 million of capital, “privately financed for the most part.”
“The Orange Loop and Hayday Coffee are all about collaboration, big and small,” he said. “We believe that it’s important to work together with all stakeholders to build a thriving Atlantic City. It takes projects big and small to realize the vision of a world-class city by the sea, which we strongly believe Atlantic City will be, over time.”
Sanchez called AC Devco’s investment in Atlantic City “incredibly meaningful because it brings meaningful ‘sticky’ capital to the city. With Stockton, we have a top-notch university and with South Jersey Gas we have a top-notch publicly traded company. Both will spur further investment and show a new, more diversified path forward for Atlantic City.”