The former Atlantic Club Casino Hotel needs a buyer, but it’s apparently in no condition to be sold.
The Boardwalk property has been shuttered for the last four years, and it’s now showing visible signs of decay. Press of Atlantic City published recent photos that reveal the deterioration of the vacant building.
Atlantic Club is falling to pieces
The photos, taken by staff writer Lauren Carroll, show palm-sized pieces of concrete scattered across the sidewalk along Pacific Avenue. Parts of the building are crumbling. Pieces of the tiled facade are missing, and there is visible water damage on some under-hanging surfaces.
Dale Finch oversees building inspections in Atlantic City. He indicated that he’s already spoken with the owners, TJM Properties. “They’re going to go to see what exactly is occurring, and I will follow up with an inspector,” Finch said.
The property’s declining condition has raised concerns more than once. In September, a large piece of the ceiling covering the main entrance collapsed into a pile of debris. Nobody was injured, and the mess was quickly cleaned up.
There are no recent photos from inside the building, but it’s safe to assume the interior is in some disrepair, too. It hasn’t seen a customer or a feather duster since January 2014.
Other vacant casinos starting to reopen
The last five years have been unkind to other Atlantic City casinos, too. Five of them closed as the city tried recover from a hurricane hit and fend off economic collapse. Three of them have rebounded, though.
- The $2.4 billion TEN/Revel is the largest of them, and its rescue is already under way. AC Ocean Walk LLC purchased the property for $200 million and plans to invest a similar amount in updates and renovations. The building will reopen as Ocean Resort Casino sometime this year.
- The former Trump Taj Mahal was perhaps the most iconic Atlantic City casino to close. In 2017, it came to light that it would turn into Hard Rock Atlantic City. The entertainment giant bought the building from Carl Icahn as part of a $450 million investment. The real estate transaction was just $50 million of that, with the rest reserved for renovation.
- The former Showboat Hotel, Casino and Bowling Center is neither a casino nor a bowling center now. Caesars Entertainment closed the building in 2014 and sold it to Stockton University for $18 million. The University turned around and resold it to developer Bart Blatstein for $23 million a couple years later. It’s since reopened as a non-gaming hotel.
Also still vacant…
That leaves two major vacant properties, the Atlantic Club and Trump Plaza.
Both have plenty of potential, but Trump Plaza’s location might make it more attractive to buyers. It’s in the heart of the Boardwalk, one of the first buildings visitors see when they drive in via the AC Expressway. And it must be in better shape than Atlantic Club.
Icahn also owns that property, and he’s actively looking to unload it. He tried to pass it off to Hard Rock as part of the Taj sale, but the new buyers declined to take on the endeavor. Somebody else might, though.
The bottom line is that the Atlantic Club may end up being the last remaining vacant casino in Atlantic City.
Pennywise investment or money pit?
A potential buyer would need to be convinced that the property is anything more than a money pit. In its current state of disrepair, its hard to make a good case. Still, the Atlantic Club does have a few things going for it.
It lives on the southern end of the Boardwalk, right where Route 40 terminates in the city. Locals coming in from Pleasantville and Egg Harbor drive right past it on the way to their destination casino. It’s also the first casino that residents of the South Shore find on their drive up the coast.
Boardwalk real estate is becoming a hot commodity once again, too. Hard Rock obviously sees the value of investing in Atlantic City, as does Ocean Walk. And the Atlantic Club has had suitors in the past, including the parent company of PokerStars. An entity with an eye toward NJ online gambling might find good value in the land alone.
Atlantic City casino revenue is also up for the second straight year, which seems to indicate that the city has turned the corner on its recession. With online gambling growing and the potential for NJ sports betting on the horizon, the property could represent an inexpensive investment in the future.
Still, the condition is an issue. As it stands, the cost of renovations will be several times larger than the sticker price. And those costs continue to rise as the building falls into greater disrepair. A good realtor knows the importance of curb appeal.
If the property can’t be rejuvenated, removal might be in order. The Atlantic Club has become both an eyesore and a danger to the public. Demolition is expensive, but it may become a better option than trying to maintain an empty, failing building.
Atlantic Club’s lineage
The Atlantic Club occupies a southern slice of the AC Boardwalk between Providence and Sovereign Avenues. It’s a beach-themed resort with more than 800 guest rooms and 75,000 square feet of gaming space.
The property was built in 1980 by casino mogul Steve Wynn at a cost of $140 million. It was originally the Golden Nugget. Although it was one of the smallest casinos in town, it became Atlantic City’s top-earning property. Frank Sinatra, Dolly Parton and Don Rickles were among those who frequented the resort.
A disagreement with state gaming regulators eventually chased Wynn out of town, though. After owning the property for seven years, he sold the Golden Nugget to Bally Manufacturing for $440 million. Hilton Hotels Corporation subsequently acquired Bally’s and rebranded the property under its own umbrella.
Then Colony Capital took over the deed as part of a $1.24 billion nationwide casino grab in 2005. The timing couldn’t have been worse. Colony pumped money into a 2012 renovation just as Hurricane Sandy brought her wrath to New Jersey. The property succumbed to bankruptcy two years later, and the doors haven’t reopened since.
Tropicana scooped up the gaming assets in bankruptcy court, and Caesars took ownership of the building itself. Colony’s creditors recovered less than $25 million from the total sale.
Florida-based TJM Properties purchased the property a couple months later for $13.5 million. And it’s for sale once again. TJM said it was close to reaching an agreement with a new buyer last year, but nothing has yet come to fruition.