DAVE DAVIES, HOST:
This is FRESH AIR. I'm Dave Davies in for Terry Gross who's off this week. Atlantic City, N.J. is going broke and facing the prospect of a state takeover. The once elegant resort town turned to gambling 40 years ago to reverse its economic decline and giant casinos sprouted along its famous Boardwalk. For years, visitors poured in since Atlantic City offered the only legalized casino gambling east of the Mississippi. But the prosperity left much of the city behind and when other states legalized gambling, Atlantic City's casino revenues crashed and its tax base shriveled. Last month, Atlantic City Mayor Don Guardian and New Jersey Governor Chris Christie announced plans for a city-state partnership to try and rescue the city. But the mayor now says the proposal the state came up with amounts to a complete takeover of the city.
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DON GUARDIAN: The final piece of legislation that the state presented to us was far from a partnership. It was absolutely a fascist dictatorship.
DAVIES: Today, we look at what's happened to Atlantic City. Later, we'll hear from Amy Rosenberg, a staff writer for The Philadelphia Inquirer based at the Jersey shore. But first, we'll speak with Bryant Simon, a professor of history at Temple University. He's written a book called "Boardwalk Of Dreams: Atlantic City And The Fate Of Urban America." Well, Bryant Simon, welcome to FRESH AIR. There are lots of beach towns in America. What made Atlantic City unique?
BRYANT SIMON: Atlantic City's Disneyland before there's Disneyland. It's really the first great middle-class resort. And the other thing about Atlantic City that makes it different is it's really a city at the beach. It's not some quaint town with dunes and white clapboard houses. It's a town that's vertical. And so it produces a 20th century urban fantasy at the beach and in many ways becomes, because of that, America on steroids - its best and worst features bloated and exaggerated.
DAVIES: Back in the '20s, what did it look like?
SIMON: Well, back in the '20s, at that point, the Boardwalk was built. And that's its own story of through a couple failed attempts - and really Atlantic City, if we just step back a little bit, was a health resort. That's how it started out. And it was marketed in the middle and latter part of the 19th century as a place to escape the noxious fumes, the dirty streets, the animals in the streets of the cities. And people would go and get fresh air. And what one entrepreneur realized is that if you provided people with a walkway to the shore - 'cause people didn't really sunbathe at that point - it gave them access to more of this kind of fresh-air feel. And that's the first iteration of the Boardwalk - you know, a few failed attempts, a kind of bit more grandeur, and the Boardwalk looks like it does today - raised up running parallel to the ocean. But by that point, people weren't going to Atlantic City necessarily for fresh air. They were going to see and be seen. And it became, in a sense, a great walkway, a kind of fantasy of an urban street without cars. But in that way that urban streets allowed people to show off and to see other people showing off, the Boardwalk was kind of the epitome of that.
DAVIES: If you looked at the Boardwalk in Atlantic City in the old days before casinos were here, on one side you'd see the ocean. On the land side, there were hotels and amusements. What did the hotels look like?
SIMON: Well, Atlantic City built a kind of architecture of fantasy. And so one hotel echoed the great Moorish architecture of the 19th century, another was meant to look like a castle. The Claridge was meant to look like a New York - like the Empire State building. And so on the not-the-beach side, there was this deeply embellished kind of fantasy of what a city would look like. At the Boardwalk level in the heart of Atlantic City were all kinds of luxury shops. My favorite is Atlantic City had maybe three or four furriers. And people would come in the summer to buy mink stoles. But that really was what Atlantic City was about. And this is the key fantasy - it was a place for the middle class millions of Americans to act rich. It was an affordable luxury. And part of that came with entrepreneurs giving them the chance to spend. And maybe the most important thing happens in the middle of the Boardwalk. Up and down the Boardwalk were - and they still are - were rolling chairs. And these were kind of like dressed up rickshaws. Often, the crowning moment of a visit Atlantic City was a Saturday night where people would get dressed up in their finest clothes and they would hire someone to push them down the Boardwalk.
DAVIES: Now, so on the Boardwalk, along the land side of the Boardwalk...
DAVIES: ...You have hotels...
DAVIES: ...And nice shops and amusements. Now, and then on the ocean side, there are these piers...
DAVIES: ...That extend out into the water. And we're not talking about fishing piers, right? Explain what was there.
SIMON: They were entertainment piers. The most famous, by far, is Steel Pier. And Steel Pier, as one person said, went so far that it seemed to go all the way to Spain. And on that pier, for one price, somebody could watch three or four movies, you could look at an incubator baby. And perhaps the most famous act on Steel Pier was the diving horse in a place at the end of the Boardwalk where a woman dove a horse into a pool of water and people watched. And again, it was the kind of attempt to pull you out of everyday reality. I mean, none of us see a diving horse in our everyday lives.
DAVIES: How big a deal was Atlantic City back then?
SIMON: Atlantic City in the '30s, just as the Depression hit, attracted 16 million people a year. That's about half of what Vegas attracts now, but the country was a quarter of the size that it is now. This was a mass resort in its heyday. Atlantic City during this period is a kind of remarkable city of firsts. It is the place where saltwater taffy is invented, which has no saltwater in it. It is the place where the Miss America Pageant starts. It's where the CIO of the AFL-CIO is born and also where Martin and Lewis first start performing. And of course it lends its street names to the most famous board game in American history, Monopoly.
DAVIES: How did Atlantic City change from its heyday through the '40s, '50s and '60s?
SIMON: It's interesting, 1955 marks the opening of Disneyland in California. And I think that's both an interesting date and an interesting moment. It speaks to the kind of movement of the American population away from the great, kind of, industrial centers of the Northeast and the Midwest to California. And Disneyland is in a suburban location. That's telling for Atlantic City because if we go and think about what made Atlantic City, it was a place of fantasy, a place where recent immigrants could come to show that they had made in America. Part of that making it in America was that it was confined to whites only, in a sense. And Atlantic City, in some ways, suffers from white flight. As it - segregation in Atlantic City breaks down - and it was a largely segregated city, both in terms of residents and in terms of access to the Boardwalk and the hotels - as that breaks down, whites leave both the city itself and the tourism section of it. Race is crucial both to the making and unmaking of Atlantic City, as it is to many American metropolitan areas.
DAVIES: When did you first go to Atlantic City?
SIMON: I first went to Atlantic City, probably, in the early 1970s, and my clearest memory is actually going to Gordon's Alley to buy my bar mitzvah suit.
SIMON: Which was interesting, right? I grew up in a South Jersey town, Vineland. And the kind of pull was not to Philadelphia as it was even six or seven years later, when I was in high school. The pull was to Atlantic City. That was the kind of metropole that, you know, my parents went to in order to buy fancy things.
DAVIES: What was Atlantic City like in the early '70s, when people were saying this is a dying town, and we need something like gambling to revive it? What did it look like? What did it feel like?
SIMON: Yeah. So the late '50s into the '60s were pretty hard on Atlantic City. And, you know, kind of increasingly, the crowds were gone. The crowds in the past - maybe one way to contrast that is - the crowds in the past, in the kind of heyday of Atlantic City, would dress to the nines. By the '60s and '70s, people were wearing cutoff shorts and sleeveless T-shirts on the Boardwalk. It used to be that you couldn't walk on the Boardwalk in a bathing suit. There were little tunnels built under it that you'd - because you didn't want to violate the propriety of the Boardwalk. There - all that was off by the 1960s and into the early 1970s. And there was a joke that people were telling that you could a bowling ball down the Boardwalk in the height of the summer and not hit anyone.
And this gets back to one of the kind of central points about Atlantic City. Its urbanity - its size and scale - exaggerated its loss. It began to kind of wear thin, and there was a kind of emptiness that was powerful to people and, in many ways, invoked the crisis of the town. And city leaders were desperate. They were desperate to revive the past, to bring back these well-dressed middle-class tourists who wanted to come to show off. And in some ways, they didn't understand that the market had changed. And in some ways, they had a tough sell, right? There was all this competition at this point - from, you know, exurban amusement parks to Disneyland to cheap airfare taking people to Miami and the Bahamas. And those tensions were, again, going to be hard to resolve.
DAVIES: So if you walked down Atlantic City in the '70s before gambling comes, you don't see, you know, mink stoles being sold at fancy shops. You see - what do you see on the Boardwalk?
SIMON: Well, the funny thing about Atlantic City in that period is you see a little bit of the past. So if you're walking down the Boardwalk in the 1970s, you might just see a mink stole store, but it wouldn't have much business. And next to it might be a place selling two hotdogs for a dollar, right. It was the lack of a cohesive narrative that the older Boardwalk had told had been sort of pulled apart by these challenges.
DAVIES: We're speaking with Bryant Simon. He is a professor of history at Temple University. We'll continue our conversation in just a moment. This is FRESH AIR.
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DAVIES: This is FRESH AIR. And if you're just joining us, we're talking about the problems of Atlantic City. And we're speaking with Temple University historian Bryant Simon. He has a book about Atlantic City called "Boardwalk Of Dreams." So in the '70s, people start talking about legalizing gambling in Atlantic City as a solution to its economic problems. Now, this was a time when Vegas was really the only place in the United States where gambling was legal. So the prospects of financial gain seemed enormous. What was the promise? Why did people want it?
SIMON: Well, the promise of gambling was in many ways kind of - of that moment, and that was - you have to remember, this was also the moment of the tax revolts in America. And there was - so how do you rebuild a place without raising taxes? This is really the question. And people in Atlantic City, like in cities around America, are groping for solutions. Atlantic City thinks about putting an aquarium in downtown. At one point, in one of the craziest ideas is to build a ski hill on a trash jump - dump on the outskirts of the city. But more and more, people come to think well, gambling is the solution. And...
DAVIES: They figured we're a tourist destination that will bring people...
SIMON: We have hotels, we're - you know, we're close to a quart - you know, we're a two-hour drive from a quarter of the nation's population. And there's no gambling on the east side of the Mississippi River. Now, we also have to remember during that period there was a real moral kind of fear of gambling in America. There were very few lotteries that are just starting to take place. Gambling is seen as a kind of moral issue at this point. And so the city leaders of Atlantic City go through this whole rundown of possible scenarios of how to rebuild the city, and they just fastened like a laser beam on gambling. They eventually sell this idea to others leaders in the state. And they get gambling on the referendum in 1974, and it fails. On the Sunday before the vote for the referendum, Methodist ministers across the state warn their congregations of the evil of gambling. And some people think that's what dooms the gambling referendum the first time around. The leaders of the city and in the state who want the revenues from gambling learn their lesson from 1974, and they realize that they have to tie gambling in Atlantic City to something that would benefit the rest of the state. And the renewed gambling position, which is gambling for Atlantic City only - they make that really clear, and that was a little vague in the first referendum - says that some of the profits will be used to help the elderly pay for some of their bills. That tips the referendum over. And on the night in 1976 when the gambling referendum passes, people literally dance in the streets of Atlantic City. It was a cold, bitter night but it didn't keep people inside. They were excited, I think, that the past was going to return.
DAVIES: So on the second try, gambling is approved in a statewide referendum in 1976.
DAVIES: The first casino opens in 1978, the Resorts Casino. What was that moment like?
SIMON: Memorial Day weekend 1978 and it's a kind of crazy scene. There are literally lines on the Boardwalk to get in. And in those days, you actually had to wear a jacket if you were a man to go into the casino. And people wait three, four, five hours to get into the casino. Once people get a slot machine, they urinate in cups rather than give up their machine. The casino makes so much money that first day and first couple of days that they have to go over to the farmer's market on the main drag and borrow peach crates to take all the money to the bank. They actually can't count it fast enough to open up on time the second day. But as an important corollary to the story, and its - I mean, maybe the best way to tell it is an Italian restaurant near that place where the peach baskets were available. For weeks leading up to the opening of the casinos, they baked ziti and lasagna and anticipated crowd upon crowd coming into their restaurant. On the Monday morning when everyone's returning home for Memorial Day Weekend or the Tuesday morning, they're throwing out the food. And this in a sense is an analogy of what's going to happen to Atlantic City throughout the gambling period. Many of the casinos are going to generate tremendous revenues. But those revenues are not necessarily going to benefit the city. And the trickle-down model that gambling had promised was one that anyone who paid attention would quickly find out about.
DAVIES: You know, it's interesting that when gambling comes to Atlantic City in 1978, for years they hold a monopoly. It's the only place you can gamble east of the Mississippi. And when I think about that, I think surely out of all of the bountiful revenues that came from that, Atlantic City should have the best schools, the best roads, the best water system - obviously, it doesn't. It's a financial basket case today. And I want to talk about why that is a bit. Atlantic City had the ocean - tremendous asset - and with gambling, it would seem it could combine a great family...
SIMON: And a boardwalk.
DAVIES: Right, and the amusements, it could be a family resort and a gambling resort. And I want to talk about the way that the casinos developed and why that somehow didn't happen. What about the construction of the casinos and the hotels and the way they did or did not, you know, generate other development and activity?
SIMON: Well, let's just talk about gambling first as an activity. What's the point of gambling from the perspective of a casino owner? It's to take all your money, right? Then we add the way they built their buildings. They literally built the buildings to trap people inside. Famously, there were no signs that pointed to the Boardwalk or the ocean. It was easier to get to the slot machines than it was to find the door out onto the Boardwalk. And as casinos developed in Atlantic city, they also realized that most of their business would come from buses and cars. And they essentially built parking decks that reached as far out as they could to the main drags of the city to the expressways that would bring people to the city. And they were almost operated like suction cups. They would suck in the cars, park them and lead people over the city literally on walkways - kind of the walkways you see in Minneapolis to keep you out of the cold - to get you into the casinos. And then when it was time to leave, you would take the walkway back. In the meantime, while you were in the casino were nationally-known restaurants subsidized by casino profits, so that they were cheaper than the local restaurants, subsidized drinks - and, you know, as people know, the drinks in casinos are pretty stiff that were free. And how do - you know, the small Italian restaurant, how can they compete with a place like this? They couldn't give away meals. They couldn't subsidize their drinks, and they didn't have free parking.
DAVIES: You know, the old Atlantic City, there were hotels, but they were of a certain scale. I mean, they were three, four, five stories and they had this elegant architecture. What sort of structures did we see as casinos developed?
SIMON: Yeah, those old buildings of Atlantic City are fascinating because they were ornate and decorated on the outside. And as you know, an ornate and decorated building on the outside says the people who walk by matter, that the public space matters, right? And the casinos that were built in Atlantic City at first other than resorts - Caesar's, Trump's Plaza, Bally's - were essentially looked like Holiday Inns. And what they said to people was everything interesting's on the inside. And they created in a sense an architecture that negates the public space. I mean, why walk down the Boardwalk if the buildings along the Boardwalk aren't there to entertain you as they were in the past? And so I think this is all part and parcel of this kind of casino development that's about creating in a sense eleven rocket ships that kind of land on the lunar surface of urban Atlantic City and say everything that matters happens inside of it.
DAVIES: So eventually there were 12 casinos in Atlantic City...
DAVIES: And they surely generated a ton of revenue. It must have sent a lot of tax revenue to the city. And there was also this casino - the Casino Reinvestment Development Agency, which was supposed to take a piece of casino earnings and use that money for projects in the city. Surely that was an opportunity to transform Atlantic City. What happened to that money?
SIMON: One would think so, right? I mean, a city of 40,000 people tracked in somewhere in the neighborhood of 30 million visitors a year could skim off enough to build flagship schools, playgrounds that would be the envy of the world. And that's not what happened. What happened was some of the money did go back into the city but not nearly enough. Most of the money went back into fueling the casino industry.
DAVIES: Well, Bryant Simon, thanks so much for speaking with us.
SIMON: Thanks for having me.
DAVIES: Bryant Simon is a professor of history at Temple University. His book is "Boardwalk Of Dreams: Atlantic City And The Fate Of Urban America." After a break, reporter Amy Rosenberg tells us Atlantic City is coping with the collapse of casino revenues and about the eccentric developer who bought the city's largest casino at a fire sale price. I'm Dave Davies, and this is FRESH AIR.
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DAVIES: This is FRESH AIR. I'm Dave Davies in for Terry Gross, who's off this week. Today, we're exploring the dire financial crisis and tough choices facing Atlantic City, N.J., the resort town that legalized gambling in the 1970s and for years saw huge crowds and big profits for the gaming industry. That prosperity left much of the city behind, though. Dilapidated houses and vacant stores stood in the shadows of giant casinos. And when other states finally legalized casino gambling, Atlantic City was in for a shock. Its casino revenues, which stood at 6 billion dollars a year just 10 years ago, are now less than half that. Four of the city's 12 casinos have closed and officials are struggling to maintain city services. Our next guest is Amy Rosenberg, a veteran reporter for the Philadelphia Inquirer based at the Jersey shore.
Amy Rosenberg, welcome to FRESH AIR. A lot of people have seen the HBO series "Boardwalk Empire," which portrays a very corrupt Atlantic City back in the 20s. In modern times, has this been a corrupt town?
AMY ROSENBERG: In modern times, it has been a corrupt town. There's been a series of mayors who have gone to jail. But in the most recent times, it's kind of gotten away from that. But the HBO series portrays a big political boss who basically ruled the town. And that is a theme that is current to this day. There's all these bosses that want to rule Atlantic City. And so that dynamic - that's a big dynamic - is really since the start of Atlantic City. The people that live there, people that work there and then this layer of boss that wants to run the town.
DAVIES: Bosses from Trenton, bosses from elsewhere...
ROSENBERG: Right. So the big boss these days really is Governor Christie. He's in some ways the latter-day Nucky Johnson - or Nucky Thompson, as HBO said. And at the height of "Boardwalk Empire," Christie actually came down to Atlantic City. "Boardwalk Empire" had kind of just kind of started. So Christie - it was 2010. Christie came into the boardwalk and basically said, we're taking over the tourism industry district; we're taking over the town. It was a big splash. Christie was popular. And they did. And that was their first - the state's first stab at taking over the town.
DAVIES: People who've seen "Boardwalk Empire" think of a guy who commits murder and is an organized crime figure. We're not talking about that kind of boss when we're talking about Governor Christie.
ROSENBERG: No. And the real Nucky Johnson was not violent like the HBO. But the tradition is political bosses who want to control things in Atlantic City. And there's just been a long history of politicians and real estate people and billionaires who all come to Atlantic City and think they can move the pieces around the board the way they want to.
DAVIES: Governor Christie is elected in 2009, takes office January of 2010. And at this point, Atlantic City's casino revenues were falling. It was clear the town was struggling. Christie comes down and has a plan. What does he want to do?
ROSENBERG: The state, we're going to put all our resources toward controlling the center of the boardwalk, the marina district, all the great stuff. And you guys worry about the neighborhoods. And at the time, it seemed like a real usurping of power. As it turned out, it was only the first in a series of state interventions that have gotten really more onerous as time has gone on. But at the time, that was considered the state coming and taking over. But the results have really been mixed from that.
DAVIES: The plan was to spend money on a big marketing effort in part to get tourists to come back. How were they going to do it? What were they going to tell the tourists?
ROSENBERG: Well, they did a lot of things. They spent $12 million on an art park, for instance. And they filled an empty lot with kind of obscure but significant artwork, the idea being let's draw a different kind of tourist to Atlantic City. They also spent money on concerts, on air show events. They came up with the do AC marketing campaign. And they tried to make it a place people wanted to go.
DAVIES: In other words, don't just gamble but do Atlantic City, the whole experience. It's not just gambling.
DAVIES: And how did it go?
ROSENBERG: You know, basically most of the casinos have expanded a little bit. It's more of a restaurant town, more of a nightclub town. But in the end, they're looking for gamblers. And the gamblers really were going elsewhere.
DAVIES: So not a dramatic increase in visitors or revenue from that.
ROSENBERG: No, no. In fact, the other thing that Governor Christie did is he wanted the Revel to be built. And he put a lot of state tax incentives that got the Revel, which was this $2 billion new casino. And he basically jumpstarted it.
DAVIES: So the governor comes and says, we're going to take over the tourism district because we can't trust you, Atlantic City, to manage it effectively. And we're going to put new money into marketing and get people coming to Atlantic City for all kinds of good reasons. And we're going to finish this huge, huge new gleaming casino, the Revel. What made the Revel different? Why was it supposed to be so important?
ROSENBERG: Well, the Revel was going to be the next generation of Atlantic City. It was going to be that resort that people came to to do everything. And maybe they'd gamble; maybe they wouldn't. But it was going to be that new model of Atlantic City to create a new idea that young people would come to Atlantic City. They would go to the nightclub, they would go to the restaurant. And, you know, they would be rich, they would come from, you know, New York City, and they would stay for several days. And this was going to be this fantasy of, you know, making Atlantic City something really exciting.
DAVIES: Did it look different?
ROSENBERG: The Revel was - it's a hugely tall building. It's very glamorous. It was problematic from the start. They put their hotel lobby on the eleventh floor. You walked in from the boardwalk through, like, a huge wind tunnel, and then you had to go up, like, two escalators to get to the casino floor. It was a strange building. It was also never truly finished. The center of it never got built. So at nighttime you could literally see through the center of this. They put a funny little giant golf ball on top of it. They never put its name on it. So it was kind of a strange place that kind of never really worked.
DAVIES: But it was huge and very, very expensive. What was the price tag?
ROSENBERG: Two billion dollars.
DAVIES: All right, so we have this moment where Atlantic City is struggling. The governor says, we're going to put new money into marketing. We're going to make sure this huge, gleaming new casino opens. And it does open, right?
ROSENBERG: Oh yeah, it opens.
DAVIES: And what happens?
ROSENBERG: Well, you know, it opened and people took tours and said nice things about it. And excellent restaurants opened up. They had a great nightclub kind of around the edges. But their whole financial model was, like, a disaster. It was owned by an independent company. They had no book of gamblers - no database of gamblers. And they were kind of...
DAVIES: The kind of high-rolling gamblers.
ROSENBERG: Yeah, they were kind of snobby toward gamblers. They didn't honor the comps that people got at another casinos. They didn't have a poker room. They - people went and kind of felt like they weren't really wanted. And they couldn't fill the building because they didn't have enough rooms. So the paradox of the Revel was that the nightclub, which was HQ, did very well. If you went to the Revel on a Saturday night, you saw young people partying. It was well known among - the club that had the best DJs. But, you know, it was kind of like the sear around an undercooked steak.
DAVIES: (Laughter) You said they didn't have enough rooms. What do you mean?
ROSENBERG: Originally, the Revel was going to be two towers. It was going to be twice as big. And it ended up being one tower with the middle of it never built up. So the middle of it is literally this internal wind tunnel which contributed to their escalating energy costs, which was another issue that bankrupted the Revel.
DAVIES: OK, so we have, at a time when Atlantic City is struggling, the fundamental problem is there are many places people can go besides Atlantic City to gamble. And this doesn't reverse any of that. And the big new Revel closes, right?
ROSENBERG: It closed. It closed. It was one of four casinos that closed in 2014.
DAVIES: Which was a terrible, terrible year for Atlantic City.
ROSENBERG: It was expected, but the reality of it was hard to watch.
DAVIES: Before we talk about that and what happens next, just tell us about what became of the Revel itself because it was such a unique project. It was, what, sold at auction?
ROSENBERG: Yeah, it went bankrupt while it was still open, and it went through tortured bankruptcy hearings - months and months where they tried to sell it. And they couldn't sell it. And what happened is they finally found one guy that would buy it. And this guy was Glenn Straub. So Glenn Straub came from Florida, had a lot of money. He's originally made his money in concrete and dirt in West Virginia, then bought the Polo Club in Florida. Glenn Straub found out about the Revel and came up and had $88 million dollars in cash. And they couldn't get anyone else. And ultimately, he took it at bankruptcy auction.
DAVIES: So we're talking about a $2 billion building going for $88 million.
DAVIES: Glenn Straub is a character. Tell us about that.
ROSENBERG: Yeah, so Glenn Straub, he's still an enigma. He is a guy - now he's come up to Atlantic City. This is his new hobby, basically. So he lives in a yacht or on a yacht in Atlantic City. The yacht he also got as a distressed property for pennies on the dollar. So he sits on his yacht and you he can see directly out to the ocean. And he sees his boardwalk property, the Revel. And so Glenn Straub, you know, he's given any number of answers as to what he'll do with the property. But basically, he's had it for almost a year, and he's done nothing.
DAVIES: What are some of his more colorful plans?
ROSENBERG: He was going to house Syrian refugees. He was going to turn it into a polo field and put the horses in the garage. He was going to make a tower of geniuses where - like a big think tank. He still talks about a casino. He's just a very odd guy. You know, if you were in bankruptcy court, he would be called to the stand and he would just give these long stream-of-conscious, emotional testimony. There would just be this silence in the courtroom, and everybody thought, no, this guy's not going to be the new owner. But then there was just no one else. So Glenn Straub wakes up every day on a yacht in Atlantic City, goes to McDonald's - apparently - goes to McDonald's, gets a coffee and then just kind of rides around his property. And he keeps promising to open the Revel, but he doesn't have a casino license - you know.
DAVIES: And for the longest time, he couldn't turn the lights on.
ROSENBERG: Right. So there's a big feud between the Revel and its energy company, which was part of the reasons it was bankrupt. The energy costs were prohibitive.
DAVIES: It had its own energy company to supply power to this massive casino hotel.
ROSENBERG: Right, and basically, energy costs were like $20 million a year. And that - the energy company was blamed for Revel not being able to be sold to a more - casino operator with a track record. So yeah, so Glenn Straub bought the Revel. Two days later, they turned off the energy. So for a while it was dark. It was considered a fire hazard. They were fining him. He didn't - the sewer lines weren't operational. And the city - you know, it began to seem like it was just going to become this horrible fire trap. But...
DAVIES: He was giving flashlight tours of the building.
ROSENBERG: He's still giving flashlight tours of the building. He was talking about building the nearby Showboat, which was another casino that closed, and essentially running, you know, extension cords. He was going to connect to their electricity. But that didn't happen.
DAVIES: But - so he still has the building, and at least the lights are on now.
ROSENBERG: The lights are on, the sewer system works, the pipes did not freeze. So - and he ended up buying the energy company for $30 million, which was considered a great sign that this guy was onto something because that was a big obstacle. So if he does end up trying to sell it, the energy plant is part of the deal now.
DAVIES: Amy Rosenberg is a staff writer for the Philadelphia Inquirer based Atlantic City. We'll continue our conversation in just a moment. This is FRESH AIR.
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DAVIES: This is FRESH AIR and if you're just joining us, we're discussing the fate of Atlantic City. With us now is Amy Rosenberg. She's a staff writer for The Philadelphia Inquirer who is based in Atlantic City and has covered the Jersey Shore for a long time. Twenty-fourteen was a terrible year for Atlantic City, but it had a new mayor, Don Guardian, elected the previous November. Tell us about him.
ROSENBERG: Yeah, Don Guardian basically came out of nowhere. No one expected him to be elected. They had an entrenched Democratic mayor, and everyone assumed he would be reelected again in a predominantly Democratic city. Don Guardian is 62, gay, white, Republican, former head of the Boy Scouts, tall guy with a bowtie, rides his bike, came out of nowhere and put together this coalition of not the entrenched Democratic community and won.
DAVIES: He's the guy who is there when the bottom falls out. What happens to the casino industry in 2014?
ROSENBERG: Right, so Don - as his prize, Don Guardian takes over when Atlantic City is truly about to have a complete meltdown. Two thousand fourteen, four casinos closed - first the Atlantic Club, which was the old original Steve Wynn Golden Nugget. That was in January. And that seemed kind of concerning, but casinos have closed before. But in September, really in the span of a few weeks, the Showboat closed, which was a corporate decision by Caesars Entertainment, then the Revel finally collapsed, which was, again, shocking that such a new casino would close with a full night club up until its last day. And then a couple weeks later, Trump Plaza, the old, tired formerly center of the Boardwalk also closed.
DAVIES: And what's the scale of the impact? How many jobs?
ROSENBERG: It was about 8,000 jobs. You have to remember, it was only a couple years after Hurricane Sandy, so there was a lot of pain from that. The casino industry had been cutting jobs really for years, so there's a lot of economic hardship. And this just added to the misery. In Atlantic City, in the surrounding towns, foreclosures were epidemic. And they're still really not recovered from it at all. A lot of people left. A lot of people went to other jurisdictions and found jobs. But there's a lot of unemployment. I think it's one of the highest unemployment rates in the country and definitely one of the highest foreclosure rates.
DAVIES: All right, so you have Atlantic City. It's faced competition from gambling elsewhere. Its revenues have collapsed. You know, emergency fiscal measures haven't worked, so now the governor and leaders in the legislature have a new plan, right? What do they want to do?
ROSENBERG: They want to really takeover this time. So this is now round three. Again, it's, you know, it's the same big ego, big boss. They think that the only way to straighten out Atlantic City is to take control of its entire government. And in response, Mayor Guardian said it's fascism. He does not want to be taken over.
DAVIES: Right, well, let's be specific about this. The governor and the Democratic State Senate President Steve Sweeney is with him on this. And what do they propose that the state be allowed to do?
ROSENBERG: Everything - you know, sell assets, take over departments, veto City Council minutes, basically run the town.
DAVIES: Unilaterally abrogate union contracts?
ROSENBERG: Right, well, that comes in and out of the proposal. That's, you know, there's some legislators who don't want that to happen.
DAVIES: But essentially take over the city's finances and do whatever they want.
ROSENBERG: Right, make, you know, what they've said would be draconian cuts. And presumably, that would also come with the aid that the city has been waiting for. Atlantic City's current budget has a $33-million-dollar hole, which is supposed to be filled with state aid that was promised to them by the state, which Governor Christie then vetoed, which is why Mayor Guardian feels double crossed.
DAVIES: Now, at stake here is some significant financial resources for the city of Atlantic City if the state agrees. I mean, the governor vetoed a package which had some of this stuff. What money are we talking about?
ROSENBERG: Well, the most important immediate money is this $30 million which has - originally was money that went to the racetracks. It's casino money. Then when 2010, it got redirected toward marketing efforts. And they created this Atlantic City Alliance which did a marketing campaign. So the money is basically sitting there. It's $30 million dollars in the last two years.
ROSENBERG: The legislation calls for that money to be redirected basically to stop the bleeding. And that money is basically sitting there because the Atlantic City Alliance is not doing any marketing. And the casinos have now said they're willing - this is what Don Guardian said - that the casinos are willing to have this money redirected. And it's been sitting there for over a year.
DAVIES: Amy Rosenberg is a reporter for The Philadelphia Inquirer. We'll talk more after a break. This is FRESH AIR.
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DAVIES: This is FRESH AIR, and today we're talking about Atlantic City, N.J., and the prospect of a state takeover as it copes with the closing of casinos and the collapse of tax revenues. My guest is Philadelphia Inquirer reporter Amy Rosenberg.
Let's just take a look at the perspective of the two sides here. Governor Christie looks at this - and, I mean, he knows that Atlantic City's suffering from competition from gambling that occurs elsewhere. What does he say the problem is?
ROSENBERG: Governor Christie would say the problem is free spending. They've been dependent on the casinos. They view - Atlantic City, you know, governments have long viewed this as a kind of an open-ended checkbook and that they have failed to rein in their budget and that they need help doing it.
DAVIES: Too much spending.
ROSENBERG: Too much spending.
DAVIES: And Don Guardian, Atlantic City's mayor, says what in response?
ROSENBERG: He says he's cutting. I mean, and there's a lot of legacy costs with the pensions and things that are not directly in their control. And they feel like they're making the steps to make those cuts. But they want to be allowed to continue to do that.
DAVIES: So you really have a standoff here, don't you?
ROSENBERG: Well, you have a standoff except that Atlantic City doesn't really have any power. It's really in the legislature. And the dynamic in the legislature is they want more casinos in North Jersey. And that's really the other drama that's going on. They're going to - they're looking to get a referendum for voters to change the constitution to bring two casinos to North Jersey.
DAVIES: And let's just clarify the geography here for people who don't know. Atlantic City is in South Jersey.
ROSENBERG: South Jersey, right.
DAVIES: And so North Jersey is right outside of New York City - a big source of gamblers for everybody. If you put casinos in North Jersey, that's just some - it's going to take that much more of Atlantic City's revenue, isn't it?
ROSENBERG: It will. I mean, there are - people predict that it will devastate Atlantic City, that more casinos will close and that, you know, it's a disaster for Atlantic City. On the other hand, the politicians say they want to get more of that revenue that's leaving the state now. And everybody thinks casinos are the answer, even though if you look at Atlantic City, you can say, casinos are not the answer. You know, casinos - if you talk to people in Atlantic City, they will say, casinos are destroying us. Casinos broke their promise to us. We didn't get anything out of this. Looking at us - we're broken. But yet, they want more casinos.
DAVIES: When you say they want more casinos, you mean people in the legislature see North Jersey casinos as an answer to the revenue needs?
ROSENBERG: They do. You know, jobs, construction - all the reasons they have casinos in Atlantic City, they want to bring it up to the North Jersey, to the New York metropolitan area.
DAVIES: You said earlier that there's a tradition of sort of boss politics in Atlantic City. And you've got - you know, the governor's a powerful guy. The state senate leader's a powerful guy. Are there other players who stand to gain or who have an interest in how this all comes out?
ROSENBERG: Yeah, there's a lot of kind of ego power politics circling the waters around Atlantic City There's a South Jersey powerbroker named George Norcross whose name comes up all the time as the person that's kind of directing a lot of what's going on, who has an interest in, for instance, Atlantic City selling its water utility. So there's been a lot of talk about they should sell their water utility, their water authority, which brings up a lot of comments about Flint and control of the water. But there's private water companies that really want this water authority. So yeah, so there's all kinds of private companies, construction companies, politically connected development companies. There's real estate people from Philadelphia who are playing their own private game of Monopoly. You know, they're coming down and buying up piers. You know, for a town that people say is dying, there's a lot of interest in all kinds of property there. So there's a secondary narrative where people are buying up cheap.
DAVIES: You've been living in the Atlantic City area for - what? - 20 years. Reflect on the changes that you've seen in Atlantic City. How different is it now?
ROSENBERG: Yeah. Well, Atlantic City is a ridiculous place on some level, but it's a place that when I got there was - there was a lot of action. A lot of people were moving to the area. There was a lot of people who came to the area when they were just out of high school and casinos had just opened. And they came down there to be cocktail waitresses and bartenders and blackjack dealers. They got these jobs. The jobs had health benefits. They made their lives there. They raised their families there on these casino jobs. But, you know, in the last five years, it's all started to contract. And now it becomes this kind of poignant, sad tale of a town that's best days were years ago. On the other hand, it's still a place - you know, the Borgata's busy all the time. Harrah's is busy. They're building convention centers. You can still go to the place where Susan Sarandon and Burt Lancaster had lunch in the Louis Malle movie "Atlantic City," the Knife and Fork. 100-year-old Dock's Oyster House is doubling in size. It's a funny place. On some level, even the summer when all the casinos closed, if you went to the boardwalk on a Saturday night, there were lots of families on the boardwalk having their vacation. They might not have been the ritziest people in the world, but it is still a place that people come to. They go to the ocean. The beach is free. You know, it's sort of a place that survives.
DAVIES: Amy Rosenberg, thank you so much.
ROSENBERG: Thank you.
DAVIES: Amy Rosenberg is a reporter for the Philadelphia Inquirer based at the Jersey shore.
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