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The monthly report by the Federal Reserve Bank of Philadelphia shows another month of continued manufacturing improvement in the economy in the region that includes South Jersey, but at a slower pace than last month.Its Manufacturing Business Outlook Survey showed indexes for general activity, new orders and shipments were all positive, but they decreased from their readings last month.
According to the report, 37 percent of firms reported increases in activity this month, while 15 percent reported decreases.
Firms also reported an increase in manufacturing employment (27 percent) and work hours this month, as opposed to a decrease (8 percent.)
The general activity index decreased this month, with 53 percent of those surveyed expecting increases in activity over the next six months.
The indexes for future new orders and shipments also fell, decreasing 5 points and 10 points, respectively.
They survey said most of the broad indicators remained positive, although most fell this month, but this still suggests continued growth in the regions manufacturing sector. The employment index, which is continuously improving, was the only exception.
Tag: South Jersey
NJBIZ stories taking place in and involving South Jersey businesses, companies and business news.
Guadagno calls for ‘circuit breaker’ in new property tax plan
In a new campaign plan put forth Wednesday, Lt. Gov. Kim Guadagno is calling for further caps on property taxes in New Jersey by limiting bills to no more than 5 percent of a homeowner’s annual household income.Referring to the proposed cap as a property tax “circuit breaker,” Guadagno, who is currently seeking the Republican nomination in this year’s upcoming gubernatorial race, says that the new threshold would go into effect if a homeowner’s school district-related property tax liability exceeds 5 percent of his or her total income. Direct credits would then be issued on tax bills for any amounts above the cap.
“We need to make New Jersey more affordable for everyday, hardworking New Jerseyans, and we need to do it now,” Guadagno said in a statement. “Instead of study commissions and hollow campaign promises, my plan will deliver immediate property tax relief targeted to the middle class families who need it most while we pursue long-term, structural reforms to lower property taxes for all homeowners.”
The campaign claims that average savings under the plan would come out to approximately $1,000 annually and be capped at $3,000.
Guadagno said that while New Jersey’s imposed 2 percent cap on property tax has helped, more needs to be done, citing data from the Tax Foundation showing that property taxes increased by $700 million last year in the state, which contributed to an average tax bill on a single-family home of $8,549. The national average, according to the Tax Foundation, is $3,296.
“After decades of attempts by Trenton politicians that have fallen short of real relief, some people believe actually lowering property taxes is impossible,” Guadagno said. “I disagree. We can and must take action before more of our friends, neighbors and loved ones flee New Jersey for lower taxes in Pennsylvania, Texas and North Carolina.”
Guadagno said that the plan would also call for increased state aid to school districts to help cover the cost of the credits and would not negatively impact current school funding levels.
While the campaign estimates the plan would cost the state roughly $1.5 billion, Guadagno said a combination of savings from a statewide government audit, excess aid from overfunded school districts and new state revenue growth would go toward paying for it.
Under the plan, the overall tax burden would be eased on middle class families rather than on millionaires, Guadagno added.
“By ensuring that homeowners aren’t forced to pay school taxes in excess of 5 percent of their household income,” Guadagno said. “New Jersey families won’t have to leave the state due to untenable property taxes. Families, seniors and the middle class will finally have certainty they’ll be able to afford to live in New Jersey.”
Horizon Health Sphere, an answer to UHC’s Optum, appeals to younger generation of docs
Horizon Blue Cross Blue Shield of New Jersey is developing its own answer to United Healthcare’s Optum, which was independently developed in 1995, called Horizon Health Sphere, NJBIZ has learned.Horizon Blue Cross Blue Shield of New Jersey is developing its own answer to United Healthcare’s Optum, which was independently developed in 1995, called Horizon Health Sphere, NJBIZ has learned.
Health insurers are increasing their footprint in the data and analytics business, providing health information exchanges as cost control tools, as well as potentially new streams of revenue.
Horizon Health Sphere applied for a trademark in January and has not been formally rolled out yet.
Allen Karp, senior vice president of health care management at Horizon, said the state’s largest insurer is working with health systems to compile data that will help in delivering better care, as well as provide greater cost predictability for the insurer.
“(Health providers) think they have the full picture of the patient, but they don’t,” Karp said. “Because they don’t really get pharmacy costs, they don’t get out-of-network costs. I mean, you would be surprised when you talk, even when their own physicians in their ACO (accountable care organization) or CIN (clinically integrated network), they don’t know where they are referring (patients to).”
Some of the highest health care costs come from interacting with out-of-network providers — a debate which has been ongoing in Trenton for eight years.
Sometimes it occurs during a procedure where a specialist who is out of network is suddenly required to interact with a patient, other times it happens when providers have relationships with other facilities, such as labs, without realizing they are sending a patient out of network.
“So, what we will do is open medical records and combine that information, and provide actionable information for both health system and provider. There is no real database for them to work off of,” Karp said.
The idea is one that may appeal to the younger generation of doctors entering the medical field.
“If you talk to older physicians, they say it’s more of an art than science,” but the younger generation coming out of school feels differently, Karp said.
On the flip side, to help patients, Horizon is partnering with an undisclosed third party to pilot an app for the patients themselves to have more control over costs.
The Open Table-like app, similar to ZocDoc but “on steroids,” will allow a patient to schedule appointments and look up providers that are in network.
Both programs are top of the list for Horizon this year, Karp said.
‘Womenomics’ is focus of upcoming, innovative conference in Jersey City
Daryl Rand said she has been working on an upcoming, innovative, three-day event for nearly a year.But in reality, “One World: Empowering Women for the Global Conversation” has been more than a decade in the making.
“Future business leaders, and especially women, must learn to become globalists,” Rand, CEO and president of Guttenberg-based HarrisonRand Advertising, said. “Their products, services and leadership will undoubtedly be affected by what is going on in the world, and will change the dialogues that they have on a routine basis within their own business landscapes.”
The program, hosted by New Jersey City University’s School of Business from May 17 through May 19 at the Mack-Cali Harborside Complex in Jersey City, will focus extensively on “womenomics” and the empowerment and advancement of women in multiple areas, including health care, financial wellness, education, corporate leadership, entrepreneurship and global business.
With a strong focus on technology-enabled live conversations with women leaders in India and China, more than 350 members of the business community and university students are expected to attend.
“This conference intends to remind us to refocus our energies on acquiring the necessary skills that will position us well within a global marketplace,” Rand said. “I believe that impacting hundreds of people within multiple networks and spheres of influence, while also communicating with and bringing together those living in other countries, will make all the difference when it comes to the realization of gender parity.”
Rand already is an expert in such matters.
As former president of the New York Chapter of the International Advertising Association and the IAA World Board, Rand observed that very few women ever got the chance to attend world congresses or participate in global organizations.
In response, starting in 2005, Rand organized and led groups of businesswomen from New Jersey and New York in traveling to India for a week to establish and grow business relationships and encourage gender parity.
Since its beginnings, approximately 120 women have traveled as part of Friends of India to serve both networking and philanthropic purposes by supporting Children’s Hope India.
“Many of the women who traveled with Friends of India served on the advisory committee for ‘One World,’ ” Rand said. “They have all been enriched, both professionally and personally, by gaining much more diverse insights into the global economy.”
Alma DeMetropolis, manager director and market manager for J.P. Morgan Private Bank of New Jersey, and Sue Henderson, president of New Jersey City University, are just two of the women who traveled with Rand as part of the organization.
“Given that JPMorgan Chase is a global financial services firm, ‘One World’ is very much in line with what we promote within our own workplace and industry,” DeMetropolis said. “This event will take a 360 degree view, knowing that what is good for women is good for families, good for communities, and good for businesses.
“For me, that was a critical factor is us deciding to support this event.”
JPMorgan Chase will act as the lead sponsor for the event.
“JPMorgan Chase also wants to continue to try to understand what the global practices and barriers are in terms of building wealth and improving financial health for women, and what the leadership, investment and communication strategies may be to continue helping women remain competitive in the global marketplace,” DeMetropolis added.
Sue Henderson said she knew New Jersey City University was the perfect host for such an event given the diversity of Jersey City.
“Within any diverse group, we need to start earlier to empower our children, both male and female, to achieve success and leadership in any industry,” Henderson said. “While there may of course be cultural differences, for women, in particular, we have found across the globe that many do not know exactly how to maneuver within the system and advocate for themselves.
“We want to help change that.”
Rand believes the global connection of this event will help to play a significant part in that change.
“While we typically view issues through an American lens, this event will help us to look at the same issues through the lens of other countries, such as China and India,” she said. “What can we learn from each other?”
Event speakers will include Katty Kay, lead anchor, BBC World News America; Michele Brown, president and CEO of Choose New Jersey; Michellene Davis, executive vice president and chief corporate affairs officer of RWJBarnabas Health; Rebecca Freed, partner, Genova Burns; Michele Siekerka, president and CEO, New Jersey Business and Industry Association; and Alfa Demmellash, co-founder, Rising Tide Capital; among others.
Aspiring managers hoping to rise to the C-suite and women entrepreneurs are especially encouraged to attend the event.
For more information, click here.
Gambling on millennials As A.C. turns away from gaming, play to the millennial culture may be key to diversified growth
Boraie Development has been in the real estate game for decades. The family-owned company is well known for making long-term plays in less-than-perfect urban areas, such as New Brunswick and Newark.
So when Wasseem Boraie, the second-generation leader who serves as the company vice president, went before his final meeting with the Casino Reinvestment Development Authority in Atlantic City a few years back, he was a bit surprised by their question:
“Are you insane?” they asked. “We just had four casinos close in a month.”
“I said, ‘Yeah, but you’ve got seven left,’” Boraie replied.
He can laugh about the moment now, because he was able to close the deal.
And he is a big supporter of the gaming industry — “Tell me a municipality that wouldn’t want a $2.5 billion industry?” — but, he wasn’t necessarily betting on an Atlantic City comeback because it was a gaming town.
He was betting that Atlantic City would also become a go-to destination for millennials.
Boriae, speaking earlier this month at a Future of Atlantic City conference sponsored by the Southern New Jersey Chamber of Commerce, said the time is right to put a new face on the old gaming town.
“Our family is humbled to have been selected as one of the first private developers to actually build in Atlantic City,” he said. “It’s something we take very seriously.
“That’s why we’re putting together something that I think is really going to make millennials want to live here.”
His $81 million project, the Beach at South Inlet, will have 250 luxury units, all of which will have state-of-the art updates and amenities. The project, he said, is the first of its kind in the city in decades. Which is another reason he had confidence when others didn’t.
“When we looked at the 50,000 people that still work in the greater Atlantic City area, 85 percent live in Atlantic County but only 5 percent live in Atlantic City. That’s what we’re going to draw from.
“I think the reason for a lot of these young people (not living in Atlantic City) is that there is no new product.”
Boraie intends to give Atlantic City new product. Others, too, aim to give it something other than gaming.
•••
Michael Renna, the CEO and president of South Jersey Industries, remembers when his predecessor, Edward Graham, first posed the idea of moving a big part of the company from Folsom to Atlantic City.
He remembers there not being much of a discussion.
The company, then called South Jersey Gas, had started decades before in Atlantic City. Renna said management felt the move was right, despite the less-than-stellar situation Atlantic City faced.
“It was the right thing to do,” Renna said at the conference. “It was coming home. Sometimes, when your hometown is in trouble, you run into the fire, not away from it. We couldn’t be happier in our decision to relocate. We think it’s going to be game-changing for our company.”
The company’s new building will be a seven-story tower over a parking garage. It will serve as one of the anchors of the soon-to-be formally introduced Gateway Project by the Atlantic City Development Corp., or ACDevco. The project will feature a campus for Stockton University, including dorms that face the ocean.
In other words, it will be everything millennials want.
And make no doubt about it, South Jersey Industries wants millennials, too.
“It’s a chance for us to accommodate a growing workforce; it’s also an opportunity for us to accommodate a changing workforce,” Renna said. “We’re not getting any younger. Our employee base is a utility company at its core. It’s everything that you would think it is. It’s a big old 1974 Oldsmobile as its culture.
“But that’s changing rapidly. We are getting much younger as an organization, with an infusion of young, bright, energetic talent in our organization. Millennials want a different type of work environment and this is giving us an opportunity to do that. It’s going to be game-changing for us because we can build the kind of building and equip it with the type of amenities that will allow us to attract the type of talent that is going to make this company a success long after all of us are gone and retired.”
Outside, Renna is confident there will be plenty of restaurants and coffeeshops to entice the next generation of workers. But he’s still planning on making the inside modern, too.
“Things that people are looking for today in a workplace, we’ll be able to put in this building, whether it’s a fitness studio or expanded dining options,” he said. “The new workforce is communal. You don’t really have a desk. You come in and pick a spot where you want to work for the day.
“It’s a really exciting opportunity. I think it’s going to be great for our existing employees, but I think it’s going to greatly improve our ability to go out and attract and retain the kind of talent that we need — those who are in college or graduating from college and are looking for their second job post-college.”
Those are just the type of millennials the city is looking for, too.
•••
Let’s not get ahead of ourselves.
Atlantic City will always be a gaming town. That was evident at the news conference to announce the opening of Hard Rock Hotel & Casino Atlantic City.
The event, which took place two days before the Future of Atlantic City panel, was on the tip of everyone’s tongue.
“I was fortunate enough to be there,” Renna said. “It really was an unbelievable experience. There’s some real energy in Atlantic City right now.
“I have never been more certain of our decision to move to Atlantic City as I am today. I really think that the city’s new birth is not coming, it’s happening.”
It’s happening, Boraie feels, because the city had to go through a necessary turnover.
“In Atlantic City, due to casinos being the only game in town for 40 years, land prices were exorbitant,” he said. “The unfortunate shrinking of the Atlantic City gaming market actually, in a strange way, created this opportunity for more of the other corporate partners to come into Atlantic City.”
It took, Boraie said, a number of things going in the right direction.
“Our bet was basically that the government was going to have to balance itself out,” he said. “We were betting that the gaming monopoly would stand, which we thought was very important to the brand because psychology has a lot to do with where people live. People have to believe in this city for it to have energy. Things that happen like the Hard Rock starts creating what John Maynard Keynes called, ‘Animal Spirits.’ It gets people excited about what’s happening in Atlantic City.”
No one is more excited than Don Guardian.
The Atlantic City mayor has come under fire from the state, which wrestled away control of the city’s finances.
But Guardian never gave up hope, and is thrilled to see his city suddenly be on a winning streak.
“We’re business friendly,” he said. “Atlantic City is back. We’re like Dracula — they’ve tried to kill us, but we keep just coming back. We’re a resilient city: 2018 is going to be a great year. We’re going to be tired of cutting ribbons.”
Guardian said the next budget will see a reduction of $56 million without a reduction in services.
“We’ll have about 400 fewer employees,” he said. “We don’t like to do that, but it’s necessary.”
Guardian said the new Atlantic City will have more to offer, especially to the younger set, rattling off concerts, air shows, Red Bull events and triathlons, among other events.
“I think we have something for everyone, whether you are enjoying a fine film or a scotch,” he said. “We have five Iron Chefs in the city with everything from fun dining to fancy dining. It’s a place to come have fun, let your hair down. It’s a great place for a second home.
“This is going to be a millennial city. That’s who we think is going to be moving here. We want this to be cool. We want them to enjoy themselves. We would prefer for them not to have cars, not to pollute the air. We want them to be able to walk and enjoy themselves, find the coffeehouses in the morning and be able to crawl home safely from that cocktail bar from the night before. That’s what we’re looking to be.”
Report 146K homes needed for fair housing obligations
More than 146,000 homes are needed to satisfy the fair housing needs from 1999 until 2015, according to the Fair Share Housing Center’s recently released study.More than 146,000 homes are needed to satisfy the fair housing needs from 1999 until 2015, according to the Fair Share Housing Center’s recently released study.
Additionally, the study found 280,000 homes are needed before the imposition of municipal caps to meet the needs until 2025.
“New Jersey is one the most expensive states in the country,” Kevin Walsh, Fair Share Housing Center executive director, said. “Working families are still recovering from the effects of the recession, the ongoing foreclosure crisis and the devastation caused by Superstorm Sandy. The Supreme Court’s January ruling affirmed in the strongest terms that towns meet their obligation under the state Constitution to provide quality, affordable homes in communities with good schools and access to jobs.”
The Housing Center submitted the study on Wednesday to the Mercer County Superior Court in an effort to determine the housing needs of five municipalities that have not reached settlements establishing their obligations.
“We expect the courts to affirm this study as we work to finally end the systemic exclusion holding back New Jersey’s working families, minority communities, seniors and those with disabilities,” Walsh said.
More than 100 towns have reached agreements with developers, nonprofits and civil rights advocates to satisfy the obligations of over 32,000 homes. These include Woodbridge, Edison, Bridgewater, Hamilton and Ewing, among others.
“A clear consensus is developing in municipalities across the state that towns can and should meet their constitutional fair housing obligations,” Walsh said. “The current process is working. Shovels are already in the ground and new homes are being built to expand opportunities for New Jersey families. This new study demonstrates that we can’t let up. We will press forward to fulfill our Constitution’s promise to these families.”
Taco Pizza is latest craze helping Tony Boloney’s build on its success
When was the last time one of the items off your menu was flown on a private jet to the Bahamas?When was the last time one of the items off your menu was flown on a private jet to the Bahamas?
For Tony Boloney’s in Hoboken, that was Wednesday.
The item? A Taco Pizza.
Owner Mike Hauke is no stranger to gimmicks and ways to capture media attention.
His “Mustache Mobile” and “Farm Table” trucks are hard to miss, as are his giveaways — one of the most recent to the first responders at the train crash site in Hoboken last September.
“I usually think of goofy gimmicky stuff. I’ll be honest, this one has brought us more exposure than anything. This was the one time I was not like, let’s do a gimmicky thing,” Hauke said.
It all began when he was at his Hoboken location (his other, the original, is in Atlantic City) and a couple of teens who were “high as hell” walked in asking for tacos about a month ago.
“They were good kids, they’re in here all the time. Surfers and skaters,” Hauke said. “They said, ‘Yo, what’s up, can we get some tacos?’ I said, ‘I see you once a week. You do understand we don’t make tacos, right?’”
But they kept asking, and Hauke was reminded of his own days as a teen.
He recalls his mother making nachos for him and his friends when they had the munchies.
“As long as we were with her and home, she would make us happy. She knew. But we were all really good kids. I was never a slacker stoner,” he said.
So when the teens walked in, and he happened to have a tortilla press in the kitchen, he got his chef on board to start making some tacos. The teens were raving about how good they were, and Hauke went one step further.
“They were bugging out, said it was the best tacos ever,” Hauke said. “I was once one of those kids, high as hell. I just kept thinking, ‘That used to be me. I used to be these guys. I’m going to blow their minds.’”
He made a large pie, threw on some guacamole, chips and cheese, and made sure each slice had three tacos on it.
That was about one month ago.
On Wednesday, he was sending five taco pizza pies on a plane, and had more than 300 orders preordered for the next three days.
And he’s going to introduce the new Taco Tuesday item on Thursdays in Atlantic City, which usually sees weekend traffic year-round, he said.
The history of Tony Boloney’s is well-known in Atlantic City, where Hauke started the small food business in the shadow of what would be the Revel casino.
It was 2008, and he catered to the roughly 5,000 construction workers daily as Revel was built. But he served more standard fare of hot dogs and hamburgers.
After realizing it wasn’t a stable business plan, he closed for a few months, stopped selling the assembly-line style foods and reopened with a made-from-scratch focus.
Then in 2009, he focused on paying attention to demand and his supplies, moved toward 40 percent fresh and 60 percent manufactured. “That was when Tony Baloney’s opened in its current form,” Hauke said.
The company is starting to taste success after opening location No. 2 in Hoboken in 2014.
The two markets are different and have different demands. Atlantic City is a seasonal spot and sees traffic on the weekends. Hauke has between four to 15 employees at that location, depending on the season. Sales have been growing at roughly 10 percent per year.
“It slowed when Revel closed and has been steady since,” Hauke said.
Meanwhile Hoboken employs about 25 to 45 employees depending on the season and is growing at roughly 25 percent per year. It’s more active from September through May and lends itself to the New York City crowd for customers and catering.
“When I started in A.C. as brick and mortar, Revel was being constructed and there were 5,000 construction workers. We were doing well and I wasn’t focused on the margins and the business. I was just focused on business development. I sacrificed a lot in terms of the bottom line,” Hauke said.
But soon he realized he wasn’t making money, mostly breaking even at best.
Loved in the area by his loyal customers, he stayed open seven days a week, even though it was draining his resources.
But, after some time, once Revel failed, he realized he needed to adopt a new strategy.
So, now Atlantic City is only open Thursday through Sunday, and Hoboken is open during the week from September through May, Hauke said.
“When I didn’t (close) for years, I lost hand over fist because people wanted me open. I can’t accommodate everyone for everything,” he said.
But with Hoboken “rocking” and a line out the door, Hauke believes he’s finally figured out both markets.
Last week should be last warning Gateway Project needs to be fast tracked
It’s hard to blame the governor for coming out so strongly against Amtrak when problems on tracks it maintains led to massive delays for New Jersey commuters into New York Penn Station for virtually all of last week.Gov. Chris Christie made bold promises of withholding future payments to Amtrak and suing Amtrak to recover money the state already had provided. And, of course, there was a call to hold hearings on the issue, which will only lead to more bluster and grandstanding.
The annoyance and outrage of commuters was overwhelming. And that outrage only grew when Amtrak CEO and President Wick Moorman admitted the organization knew of the issue on the line, but had not moved it to the front of the line of its triage-type list of repairs it is scrambling to make.
The era of false outrage has never been so high.
Amtrak could have and should have fixed the line earlier. It was a missed opportunity that Moorman, a standup guy from Virginia with an honest and transparent management style many in this region could take a lesson from, acknowledged in a press conference at the station and a follow up call to NJBIZ.
But to be outraged over a missed opportunity that impacted eight of Amtrak’s 21 lines is to ignore the bigger issue that everyone — including Christie — have known about for years: Penn Station is in terrible condition and needs a massive upgrade to serve commuters properly for the next 100 years.
And the two tunnels that connect New Jersey to New York may be in worse shape than Penn Station.
The latest derailment at Penn Station, the second in two weeks, should be viewed as a warning tremor for what everyone knows is coming: An overworked transit system that is buckling and will soon break.
The Gateway Project, a proposal to build two more tunnels from Jersey to New York City needs to be fast-tracked as soon as possible.
There is no alternative.
Moorman, a 40-year man in the industry at Norfolk Southern who was brought out of retirement to take on the task of leading Amtrak, said there is too much to do and too little to do it.
An overloaded system leaves roughly 3-5 hours a night for maintenance, which is not enough time to do everything that needs to be done — though Moorman is committed to trying.
“This is a station that is, first of all, incredibly busy,” he said. “It’s absolutely full at peak. The tunnels are full at peak, the station is full at peak. Any hiccup, no matter how small, is going to start to delay things. As a result, unless we are willing to take delays, we don’t get much time to maintain it.”
The problem, Moorman said, is not money or manpower. Just the effort it takes to do the maintenance.
“Because it’s so constrained down there because of the space, it’s time consuming and tedious to fix these things,” he said.
Two more tunnels — and an upgraded station that was able to handle more tracks for boarding — are the only answer.
And, much like funding for the Transportation Trust Fund, everyone knows about the problem and how this is the only solution. We’re long passed the time for merely keeping up with maintenance.
Until that time, Moorman said he’ll make sure Amtrak does its best.
“I understand the governor is upset,” he said. “And I understand NJ Transit (is upset). We inconvenienced a lot of residents of New Jersey.
“I was brought in to help work on issues like this and what I told our folks we have to ramp up our efforts. We cannot let something like this happen again. That means we’re going to have to put the highest priority on this in the face of a lot of other competing priorities for outages in the station.
“We’ve got (to) invest money, we’ve got to ensure that we have time for our workers to get in to do the proper maintenance and not get to the point where we let it run too long.”
Moorman was wooed out of retirement by Amtrak chairman Tony Coscia. And you can’t beat the cost.
When he discovered that even a $1 a year salary would impact his pension and retirement payments, Moorman agreed to volunteer. He commutes weekly from a home in Charlottesville, Virginia.
“I’m a guy who believes in the industry and knows the industry has been very good to me,” he said. “When Tony Coscia called me and convinced me — to my wife’s utter dismay — to do this, I thought it was important to do and so I’ve come up and am trying to fix a lot of things.
“I’m doing this essentially for free and that’s fine. I’m happy to do it. It’s interesting. It’s meaningful. The prospect of getting fire, my wife would be jumping up and down and I would go back to Mr. Jefferson’s community.
“I do like to think I’m doing it for all the right reasons. When the governor says things like that, I didn’t take it personally in anyway shape or form.”
Moorman has Coscia’s full support.
“Wick is the real deal,” Coscia said. “I spent six months recruiting him to the company. This past week is painful but underscores all the work that needs to get done after decades of neglect. It would be much easier to apply band-aids and leave it for the next group, but we will fix this.”
By this, Coscia means a whole lot more than items such as more issues with cross ties, which caused last week’s mess.
He’s talking about the Gateway Project.
It’s time for others to do the same.
WCRE reports cautious optimism for commercial real estate in southern N.J.
Commercial real estate firm Wolf Commercial Real Estate recently reported it has found 2017’s first quarter to have begun on a “cautiously optimistic” foot in southern New Jersey.Commercial real estate firm Wolf Commercial Real Estate recently reported it has found 2017’s first quarter to have begun on a “cautiously optimistic” foot in southern New Jersey.
“Even with an expected winter slowdown affecting office leasing activity, and added anxiety with the transfer of political power in Washington, the overall mood of the market seems to be positive,” Jason Wolf, founder and managing principal of WCRE, said. “As we’ve seen the past couple of years, several business sectors increased their occupancy needs during the first quarter, and we continue to see increased capital spending, construction hiring and expansions.”
In its findings, the firm reported 317,886 square feet of new leases and renewals in Burlington, Camden and Gloucester counties. Approximately 767,988 square feet, totaling more than $133.5 million, traded hands, WCRE reported.
Vacancy is 11.05 percent, and average rents ranged from $10 to $14.50, the firm found.
“While much of the pricing for commercial real estate accounts for increasing interest rates, many purchasers are showing signs of hesitation and fears of potential decreases in market fundamentals,” the firm said in a release. “The industrial market in the city of Philadelphia and its suburbs is fetching price points never experienced in the marketplace. The lack of available product coupled with significant demand is putting further upward pressure on overall pricing.”
WCRE focuses in office, retail, medical, industrial and investment properties in southern New Jersey and the Philadelphia region.
Grapevine Analysis Hard Rock’s plans for Atlantic City
Hard Rock International will pump $375 million into the recently acquired former Trump Taj Mahal casino and hotel with the hopes of rebranding the Boardwalk property into a world-class entertainment and gaming destination.
Hard Rock International will pump $375 million into the recently acquired former Trump Taj Mahal casino and hotel with the hopes of rebranding the Boardwalk property into a world-class entertainment and gaming destination.
On Wednesday, company officials formally unveiled their renovation plans for the site, which, when completed in summer 2018, will feature two separate 7,000-plus-seat multipurpose arenas, a larger Hard Rock Café, redesigned hotel rooms and an updated casino floor that will include 2,400 slots and 130 table games.
Hard Rock says the property will lead to 3,000 permanent positions and 1,000 construction jobs, helping to counter the effects of the loss of approximately 3,000 jobs last October when billionaire investor Carl Icahn and management company Trump Entertainment Resorts closed the Taj Mahal due to poor performance and ongoing labor disputes over what local labor leaders claimed were inferior benefits included in recent contract negotiations.
One by one, company representatives and elected officials lined up at the podium Wednesday to sing the project’s praises. But how good of a deal is it? Let’s take a closer look.
Why is Hard Rock interested in the Taj Mahal? Why not Revel?
When you look at other Hard Rock properties across the globe and then compare them to the renderings the company has released for the Taj Mahal site, it’s hard not to immediately think that Revel would have better served the project. It’s sleek, modern and easily fits with the Hard Rock theme.
No doubt someone could’ve turned that massive golf ball at the top of the building into one of the brand’s signature guitar logos.
Hard Rock Chairman Jim Allen has previously said in reports and reiterated Wednesday that the company did look at Revel, which has now been rebranded as TEN Atlantic City under new owner Glenn Straub, but has mostly left it at that.
While we don’t have details of the Taj sale, we know that Hard Rock plans to put $375 million towards the site to remake it as its own. That’s not a massive amount, considering that the casino opened in 1990 and its unique theme is heavily carried throughout the entire property.
Sources have repeatedly told us through the years since Revel’s closing that despite it still being the newest and shiniest of the bunch, the casino’s layout is dreadful and would require a huge capital investment just to correct its design flaws before anything else was touched up.
Consider that, in 2014, when Revel was going up for auction after declaring bankruptcy for a second time, industry experts told us that fixing the layout alone could cost a potential buyer approximately $200 million.
Hard Rock officials Wednesday referred to the Taj’s “good bones” and experts point out that the building former owner Donald Trump once referred to as the “eighth wonder of the world” used to also be the highest-grossing casino in the city until Borgata opened in 2003.
Sources say that a well-established gaming giant like Hard Rock should have little issue restoring the property into a moneymaker, as long as the Atlantic City market will allow for it.
So, can Hard Rock make money on the property?
Seems like a silly question, but the way things have been in Atlantic City, you never know.
At least, that’s the perception. One Allen quickly said was false.
“I want to make sure everybody understands. We’ve done amazing in-depth analysis. No one in Atlantic City is losing money. Everybody is positive at the EBITDA line,” he said of the acronym for earnings before interest, taxes, depreciation and amortization.
“And frankly, some properties are doing in excess of $250 million in EBITDA, that rivals anything in Atlantic City except for two places. Atlantic City is back, it’s profitable.
“Certainly, yes, I am from this area. But I assure you I would have never made this decision and recommended to the tribal council or the board of Hard Rock International if we did not think this would be an amazing addition and asset to the Hard Rock brand and family.”
Is this good for Atlantic City?
So, the obvious answer is undoubtedly “yes.” There are 3,000 new permanent jobs being created to fill the void of the 3,000 permanent jobs that were cut due to the closing of the Taj. The 1,000 or so construction jobs on top of that are just gravy.
Elected officials from both sides of the aisle are calling this project a winner. Gov. Chris Christie and Senate President Steve Sweeney (D-West Deptford) had a bit of a Kumbaya moment Wednesday as each talked about their willingness to work with the other and make the hard decisions needed to revive the city.
“We’re bringing Atlantic City back,” Sweeney said. “We’re bringing jobs back.”
The project also got a thumbs-up from state Sen. Jim Whelan (D-Northfield) and even Mayor Don Guardian, who last year likened the Christie-imposed state takeover of Atlantic City to a “fascist dictatorship” and has remained critical of the governor, gave Christie some credit and said the project was a “great way to rebuild our city.”
Assemblyman Chris Brown (R-Linwood), who had been very critical of the Christie takeover of the city, was equally critical in telling the Press of Atlantic City that Hard Rock’s project was a “direct result” of last year’s ballot-box defeat of the referendum to bring casino gaming to northern New Jersey.
“There was talk of Hard Rock being interested in a boutique casino in Atlantic City. However, the interest waned when they had the option of building a billion-dollar casino in North Jersey,” Brown told NJBIZ.
Which brings us to our next question…
Didn’t Hard Rock want to build a casino in the Meadowlands?
Yes. One source in the room Wednesday noted that he thought it was a little rich to hear Allen and other officials talk about Hard Rock’s commitment to not just New Jersey, but Atlantic City in particular when, less than two years to the date, Allen was unveiling the company’s plans for a $1 billion casino project at the Meadowlands Racetrack.
On Wednesday, Allen played up his Atlantic County roots and investors in the project, include the Jingoli family of Lawrenceville and the Morris family of Piscataway.
“We don’t forget where we came from, and that’s why we’re back here,” said Jack Morris, CEO of Piscataway-based Edgewood Properties.
That’s all fine and dandy, and the case can be made that any investment in New Jersey is potentially better than no investment at all, especially with last year’s proposal slated to pump a chunk of new revenue back into Atlantic City.
But that was then, and this is now. Despite its defeat, the referendum is sure to come up again in another couple of years and, as one source pointed out, Hard Rock could still be in line for a future casino in northern New Jersey if any future proposal is similar to last year’s in that only currently-licensed operators in the state will be permitted to apply for a new gaming permit.
Just some food for thought. For now, it’s all about Atlantic City for Hard Rock.
But what about Pennsylvania? Does Atlantic City really need another casino?
From a pure gaming revenue standpoint, Hard Rock’s place in Atlantic City is questionable.
In case you’ve been living under a rock for the last decade, the growth of Pennsylvania casinos has wreaked havoc on the city’s gaming market, and there is yet another massive property in the works coming soon to South Philadelphia.
Since the shuttering of four Atlantic City casinos in 2014, industry experts have noted that revenues have increased. But that’s mostly due to less competition, not a growing market.
Allen got out in front of that topic Wednesday, noting in his news conference that Hard Rock plans on attracting new customers to Atlantic City, as opposed to just poaching them from other existing properties.
“We are very confident that we can grow the market,” Allen said.
While that’s debatable, a point to consider that was repeated throughout Wednesday’s event, particularly by Christie and Allen, is that Hard Rock wouldn’t be entering the market and undertaking a massive renovation project if it didn’t think it could make money.
And though other existing properties may now have to deal with increased competition for customers, no one can deny that Hard Rock will bring a much-needed boost of energy and intrigue to the market that could, indeed, attract a new audience.
Nothing wrong with some healthy competition if it makes everyone else better, right?
So, what’s next for Atlantic City?
For believers in the city, one of the best parts about Hard Rock’s entry into the market is that it’s not occurring in a bubble.
Elected officials will tell you that it’s not just Hard Rock. It’s Hard Rock, plus the Stockton University Gateway Project.
It’s Hard Rock, plus Boraie Development’s planned $81 million residential project in the South Inlet.
It’s Hard Rock, plus Philadelphia developer Bart Blatstein’s acquisition of the Showboat and other properties in the city.
There is finally momentum, even if it’s tough to quantify at the moment. It’s way too early to celebrate, but officials aren’t totally off base with their high levels of enthusiasm.
That’s how the dialogue starts changing from it being Hard Rock, plus a state takeover.
The ultimate Grow N.J. program starts with Jersey Guys Why Morris, Jingoli feel Hard Rock venture is a gamble they are eager to take
Jack Morris was walking through Atlantic City with longtime friend Joe Jingoli when he knew he had finally had enough.”I saw things that I didn’t like,” he said. “I saw things that hit me straight in the heart and I said, ‘I just can’t walk away and not do anything about it.’ “
Morris and Jingoli had been talking about getting into the casino game since Revel had declared for bankruptcy a year before, in March 2016. Now it was time for action
Soon after, Morris made it happen — as only a Jersey guy could. He got into his car, drove to New York City, met with Carl Icahn and made a deal to buy the Trump Taj Mahal. Just like that.
Jingoli recalled the story with a laugh Wednesday afternoon at the formal launching of the opening of the Hard Rock Hotel & Casino Atlantic City, a deal that will bring $300 million in investment and 3,000 jobs to the city.
“Let me tell you how this whole thing really happened,” Jingoli said. “Jack Morris got in his car a little more than 30 days ago and said, ‘I’m going up to meet with Carl Icahn and we’re just going to make a deal and buy this thing.’ He walked in and made a deal that night.
“He called me on the way back home at 10 o’clock and said, ‘We just bought the Taj Mahal and we’re closing in 30 days.’ “
State incentives have done wonders for helping to spur investment and revitalize New Jersey’s struggling urban cores. The results can be seen in Jersey City, Newark and now Camden.
But if the state is ever going to regain its place as an economic stronghold in the country — not one routinely labeled and ranked as a “tough place to do business” — it’s going to take individuals dedicated to growing the state as much as growing their bottom line to do the dirty work.
Morris and Jingoli, who teamed with the world-renowned Hard Rock International, are just the latest examples.
Don’t be fooled. Morris’ car ride to New York City wasn’t a wild dash made on a whim. That’s not a recipe for success when dealing with Icahn, one of the country’s premier dealmakers. And it’s certainly not how Morris got to where he is today.
It was the final step of a process. The final step of a vision that Morris and Jingoli saw because they are Jerseyans first.
“We’re here on the ground,” said Jingoli, who has worked and lived in Atlantic City for many years. He currently heads up efforts at the Atlantic City Boys and Girls Club to help local teenagers find the right path.
“Jack has a lot of real estate in this county. He saw this early because he’s on the ground. If you’re not here, you won’t see it. How do you get in on the bottom? You are here on the bottom.”
Smart businesspeople seeing the opportunity in their home state: It’s the ultimate Grow New Jersey program.
Morris and Jingoli know they can’t do it alone. Especially in Atlantic City, the toughest — but arguably most important — urban center in this state that needs revitalization.
They are thrilled Bart Blatstein has purchased the Showboat and a handful of other city properties in the past two years. Glad Boraie Development has broken ground on the first luxury apartment complex in the city in decades. And, of course, happier still about the soon-to-be formally introduced Gateway Project, which will bring businesses and higher ed to the city like never before.
“I have a passion for helping cities and towns that need to be revitalized,” Morris said. “It is something that I truly enjoy; it gets me fired up to have this opportunity.
“This is a big one, but you can do it when you have good partners, like the Jingoli family and Jim Allen at Hard Rock. This is not about some big company coming in here and making money. We know lots of people with lots of money. This is about putting the time and the passion and the commitment into making this work.
“Now, it’s about taking it from here and seeing where it’s going, because everybody is going to want to follow our footsteps and see how they can benefit from the success that we can bring. And we want that. We don’t think we’re going to do this ourselves. We need other good people to come in.”
Both Morris and Jingoli realize there is plenty more to do.
Allen, who also hails from New Jersey, said the Hard Rock is coming to Atlantic City because he is confident it can make money in Atlantic City. That in itself speaks volumes about a perception in the business community that the long-struggling gaming town finally may be on the upswing.
But all those involved know a revitalization can’t begin and end at a gaming table.
Jingoli stressed how the Hard Rock will bring jobs and hope to the next generation, which he sees every Wednesday night at the Boys and Girls Club programs that he himself helps teach. The latest is a construction industry course whose graduates can earn financial incentives to continue on to college or entry into construction projects themselves.
“We’re going to have 3,000 jobs,” he said. “That gives us a lot of head room to employ local people. Hard Rock has committed to having jobs that are going to be coming in one year, two years, three years and matching that to the students who are in our live classrooms at the Boys and Girls Club so that young people can say, ‘I’m going to work there.’
“That will help them make the right decisions. We believe when the choice comes to make a right or a left, they’ll make the right decisions because they’ll have the opportunities, the same opportunities that we have had. It’s our belief that if you put the same opportunities in front of these local people, you’ll get the same good positive results.”
Morris is eager to get going.
“People have asked me, ‘What are you doing here? You have so much on your plate, it’s such a big risk,’ ” he said. “And the only thing that can come to mind is: We’re the Jersey boys.
“I was born and raised in this great state. As were my partners. And I’m so proud to be here today with the Jingoli family and the Hard Rock team. They can say what they want about New Jersey, but one thing I can say is, ‘We have loyalty.’ And we don’t forget where we came from. And that’s why we’re back here.”
Hard Rock unveils plans for Atlantic City casino hotel
Hard Rock International formally unveiled its plans Wednesday for the $375 million renovation of the recently acquired former Trump Taj Mahal casino and hotel in Atlantic City.Hard Rock International formally unveiled its plans Wednesday for the $375 million renovation of the recently acquired former Trump Taj Mahal casino and hotel in Atlantic City.
Set to open in summer 2018 as the rebranded Hard Rock Hotel & Casino Atlantic City, the Boardwalk property will feature two separate 7,000-plus-seat multipurpose arenas, a larger Hard Rock Cafe, redesigned hotel rooms and an updated casino floor that will include 2,400 slots and 130 table games.
Hard Rock Chairman Jim Allen said Wednesday that the company plans to “do it right” with its renovation plans, aiming “to create a true entertainment destination, not just a gambling destination.”
Though Hard Rock is based in Florida, the company played up its local ties Wednesday. Allen is an Atlantic County native and investors in the project include the Jingoli family of Lawrenceville and the Morris family of Piscataway.
“We don’t forget where we came from, and that’s why we’re back here,” said Jack Morris, CEO of Piscataway-based Edgewood Properties.
Allen, who noted that the deal for the property had been finalized with billionaire investor Carl Icahn and that “the funding is in place to move forward,” added that Hard Rock believes it can not only be profitable in the Atlantic City market, but that it won’t need to poach customers from other properties, either.
“We are very confident that we can grow the market,” Allen said.
The Taj Mahal has been shuttered since October, when Icahn and former management company Trump Entertainment Resorts closed the property due to poor performance and an ongoing labor strike over what members of Unite Here Local 54 deemed to be inferior benefits included in recent contract negotiations.
Though President Donald Trump’s name adorned the casino up until earlier this year, the former Atlantic City real estate mogul has not had an ownership stake in the property for many years.
Hard Rock says the property will lead to 3,000 permanent positions and 1,000 construction jobs.
That was music to the ears of several of the state’s elected officials present at Wednesday’s unveiling.
Gov. Chris Christie said he is “thrilled to welcome” Hard Rock to the state and noted that the company’s investment is a sign to all that “Atlantic City is worth coming into (and) worth working with.”
“This is an extraordinary brand that’s coming here to Atlantic City in a very big way,” said Christie, who added that he didn’t think Hard Rock “would come here if they didn’t think they could make money.”
Christie said that, collectively with Senate President Steve Sweeney (D-West Deptford), his administration has “shown that we’re committed to doing the hard things in Atlantic City,” a place he said was previously far too accustomed to doing the “easy things.”
“Whatever we need to do to get the previous governmental obstacles out of the way, we will do that,” said Christie.
Sweeney called Wednesday a “good day” for the state.
“We’re bringing Atlantic City back,” Sweeney said. “We’re bringing jobs back.”
Local officials appear to also be on board. State Sen. Jim Whelan (D-Northfield) called the project “good stuff” and Mayor Don Guardian added that the Hard Rock development was “a great way to rebuild our city.”
The project even received the thumbs-up from Steven Van Zandt, the Bruce Springsteen & the E Street Band guitarist and actor of “The Sopranos” fame, who was on hand Wednesday.
“These guys are going to do it right this time,” Van Zandt said.