August 13, 2014 / 10:46 PM / in 4 years

New Jersey to hold summit to rescue Atlantic City

(Reuters) - New Jersey Governor Chris Christie said on Wednesday he would convene a bipartisan summit in September to seek ways to rescue Atlantic City from a slump in its mainstay casino business.

The summit will include both Democratic and Republican state legislative leaders, as well as Christie administration officials, county and city officials, organized labor and casino industry representatives, among others.

Atlantic City has struggled with casino closures as neighboring states have lured gamblers away. Revel Casino Hotel said on Tuesday that it would soon shut its doors, making it the fourth casino in the past year to announce a closure.

The four closures will reduce city employment by about 7,000 and strip 17 percent, or $1.9 billion, from the city’s taxable property values, Moody’s Investors Service said on Wednesday. Moody’s cut Atlantic City’s credit rating to junk last month.

Construction on Revel started in 2007, but backer Morgan Stanley took a $1.2 billion loss in 2010 to pull out after the recession, delays and costs overruns hurt the project.

New Jersey stepped in with a promise of $261 million of future tax rebates, helping to lure new lenders and close a financing gap.

The 1,400-room resort opened to great fanfare in 2012 but filed its second bankruptcy this June. It has been looking for new buyers, and indefinitely postponed an auction scheduled for Thursday, saying it has not yet found qualified purchasers. It could liquidate its assets in bankruptcy court.

Christie and New Jersey Democrats have said Atlantic City’s economy, heavily dependent on casinos, needs to be broadened.

“Important signs are evident of the progress taking hold in the non-gaming development and economic activity we are seeing in (Atlantic City), including businesses opening, attractions being added, and key non-gaming revenue streams rising,” Christie said in a statement on Wednesday.

If Revel is any indication, that effort has not caught on. It was supposed to usher in a new era of Las Vegas-style entertainment that combined gambling with nightclubs, and upscale shopping.

By not focusing enough on its casino, instead of its resort and convention center, it failed to attract traditional Atlantic City gamblers, who do not stay overnight, according to its bankruptcy filings. It also lacked a player’s club and affordable food and drinks, the documents said.

Reporting by Hilary Russ; Editing by Richard Chang

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