South Jersey’s Balancing Act

Find out if Atlantic City’s doldrums are weighing down other towns in this vast eight-county region.

By Eric C. Peterson, Contributing Writer On Sep 15, 2014

This is a tale of two coasts – the Atlantic and the Delaware – and the eight counties constituting South Jersey. The news in the region has been mixed, notably tempered by the closings – and pending closings – of several Atlantic City casinos. Challenges remain along the Delaware River, but on both coasts, concerted efforts are underway to fix what’s broken.

While efforts are revealing positive results, they don’t necessarily make headlines as do casino closings. Additionally, those efforts also face a mixed economic picture. Government incentives are paying dividends and, overall, the mood in the region is increasingly optimistic.

“We’ve seen some positive projects, some in the planning stages,” says Marlene Asselta, president of the Southern New Jersey Development Council (SNJDC). “What’s happening in Camden is exciting. There are some disappointments in Atlantic City, but there are some interesting things happening. There is enough for us to be encouraged.”

Betting on AC

The bad news, of course, is Caesars Entertainment’s closure of the Showboat; Trump Plaza’s closure slated for mid-September; and the September 10th closing of the Revel Casino Hotel.

“We understand the media’s focus on these closings,” says John Palmieri, executive director of the Casino Reinvestment and Development Authority (CRDA). “It’s hard news, but not surprising – the press has been reporting the struggles here for years. And it’s no surprise that we’re dealing with an economy in transition. I’d like to think that ultimately the casino industry will right-size, here and nationally.”

Such was the bad news that in mid-summer, Moody’s Investors Service downgraded Atlantic City’s underlying general obligation rating, listing the city’s outlook as “negative.” Moody’s said the downgrade reflected the city’s “significantly weakened tax base, revenue-raising ability and broader economic outlook.”

To counter that, Palmieri says, “CRDA’s aim is to create a more diverse economy. Our assets speak for themselves: the boardwalk, ocean, restaurants, entertainment and retail. We’re doing what we can to support these, through roadway and other infrastructure improvements.”

Part of that is “trying to get the private sector to step up and make investments – the role we play is to help provide gap financing and approvals needed to get things built,” Palmieri says. Some examples: A $30-million loan got the highly successful Margaritaville up and running, and a $12-million loan to help make the new $40-million Bass Pro store near 140-store Tanger Outlets possible.

More retail is in the works, notably a $30-million public marketplace, patterned after Philadelphia’s Reading Terminal Market. Expected to be underway before year’s end, “it’s an important project to help connect the Atlantic City Convention Center and Tanger Outlets with the boardwalk,” Pamieri says.

Speaking of the convention center, another one is in the works – Harrah’s $126-million conference center in the Marina District, according to Jeff Albrecht, general manager of the Sheraton Atlantic City and chairman of Meet AC, a new organization within CRDA. The focus for Harrah’s will be smaller, corporate-centered conferences.

Meet AC is a new non-profit agency established “to market Atlantic City for more conventions and meetings.” According to Albrecht, it recently hired its first CEO, industry veteran James Wood. “There is great potential – we have good mid-week rates compared to other cities, and much more to do here,” he says.

And all is not lost for casino properties. Tropicana has rolled out a $35-million capital improvement program, and the former Claridge Casino Hotel was sold to Florida-based TJM. The 500-room hotel, with renovations completed, will operate as a non-casino property. The former casino floor will be utilized as a not-for-profit theater and perhaps a children’s museum.

For former casinos in general, “we have to look at new uses fitting the non-gaming, destination/tourism profile,” Palmieri says. That could include conversion to condos, or vacation rentals.

Residential is on the move in Atlantic City. Notable projects include Boraie Development’s 250-unit rental complex, The Beach at South Inlet. And Procida Realty’s 57-unit Eastwind II, and 89-unit Connecticut Crescent and Carolina Crescent properties. “Projects like these are critical to adding much-needed housing stock to our neighborhoods,” Palmieri says.

“It’s been tough, but people who know Atlantic City are actually excited about the direction in which we’re headed,” Albrecht says. “We’re turning more toward the Las Vegas model – years ago, 70 to 80 percent of Las Vegas’ business was casinos; now it’s in the 50 percent range. Gaming is still important for us, but all of the other entertainment, food and beverage and shopping will balance that out.”

The region figures to get a boost from United Airlines’ new nonstop service between Atlantic City International Airport and Chicago and Houston – United’s two biggest hubs. Additionally, a port for cruise ships at Gardner’s Basin could be in the works.

One good sign: “For non-gaming hotels in Atlantic City and County, May was up 20 percent over last year in terms of room revenue, and April was up 10 percent,” Albrecht says. “We’re seeing an influx of people visiting for a couple of days instead of taking the bus in for a single day to play the slots.”

Giving power to all of these entities is Atlantic City Electric (ACE), which services 538,000 customers in the region. Earlier this year, ACE’s parent company, Pepco Holdings, Inc., announced its merger with Exelon Corporation. The combination brings together Exelon’s three top-performing electric and gas utilities – BGE, ComEd and PECO – and Pepco’s electric and gas utilities – ACE, Delmarva Power and Pepco. The combined company will serve approximately 10 million customers. ACE currently employs 544 workers. According to a company spokesperson, no layoffs are expected, but some positions will be reduced through attrition. Additionally, all employee collective bargaining agreements will be honored.

Tourism is also up in The Wildwoods, reports John Siciliano, executive director of the Wildwood Convention Center. “We experienced a very good spring – we’re fortunate that we have good repeat convention business. … And we had an awesome July 4th weekend.”

The 260,000-square-foot convention center, now 12 years old, “has given us the ability to do so much more,” he says. “In 2001, in our former 30,000-square-foot facility, we hosted 49 groups. In 2013, we hosted 134 different groups, 218 event days and 133,000 room nights,” he says.

For tourism in general, “we have been stressing the value of the Wildwoods – free events, free beaches and more,” Siciliano explains. “Our target market is families with children, and we’re utilizing social media marketing, e-marketing, to a greater extent. Our campaign is that Wildwood isn’t just a beach and boardwalk, but part of a family experience.”

A Balancing Act

“It’s important is to look at what’s happening in the region in a positive way – there’s a lot to be said about how you approach things,” says SNJDC’s Asselta. “What balances South Jersey along the Atlantic is what’s going on along the Delaware River and Delaware Bay.”

“What’s going on” includes a
new 600,000-square-foot manufacturing plant on the Camden waterfront, where Marlton-based Holtec International will build components for nuclear reactors. A $260-million tax package approved by the New Jersey Economic Development Authority won Camden the project, which involves nearly 400 jobs.

Tax awards have also come into play in Camden for a new headquarters/practice facility for the Philadelphia 76ers ($82 million); and the renovation of four buildings and construction of two new buildings by Broadway Housing Partners to house students and employees of Rowan University’s Cooper Medical School ($6.2 million).

State incentives continue to play a key role across the region, and in the eyes of State Sen. Donald Norcross (D-Camden/Gloucester), they have evened the playing field with other portions of the state.

Referring specifically to the Economic Opportunity Act of 2013 (EO13), “when the Legislature and governor decided to look at how New Jersey was doing incentives, we knew what we wanted to do,” Norcross says. “Prior to EO13, of roughly $4.4 billion of projects in New Jersey, Southern New Jersey only got 13 percent. South Jersey represents close to 30 percent of the state’s population. We were also dealing with the incentives across the river in Philadelphia, and we were getting crushed.”

In response, “we created the Garden State Growth Zone, with Camden designated as one of four,” Norcross says. “Since EO13, we now see South Jersey getting 37 percent of those incentives dollars. The Holtec announcement is transformational. If you were to write a list of the type of companies you want to attract, you’d talk about manufacturing, exports, high-skilled jobs, medium-skilled apprentice jobs, executive jobs, research scientists – Holtec brings them all.”

Much of groundwork in Camden is laid by the Cooper’s Ferry Partnership, a non-profit organization “that facilitates the revival of Camden by creating an environment where people choose to live, work and invest,” explains CEO Anthony Perno. At issue are long-range plans for redevelopment of Camden’s waterfront and neighborhoods, working in tandem with government, the private sector and community partners.

That includes such infrastructure projects as East Camden’s Cramer Hill, where a flood mitigation project is underway; a rebuild of Pine Point Park; rebuilding and extension of roads on the waterfront; a plan to integrate the University District through the downtown area; and a residential plan for the Cooper Grant/Central Central Waterfront, the latter with the help of a $100,000 grant from the Wells Fargo Foundation.

County-wide, “we’re working with each community on initiatives focusing on the White Horse Pike and Black Horse Pike corridors,” says James Blanda, executive director of the Camden County Improvement Authority (CCIA). “They have been under-utilized, and we’re seeing deterioration in the infrastructure. We’re working with businesses and chambers to make the corridors more of an attractive or viable business sector.”

Current projects include LeewoodNJ’s Leewood Villages at Rowand Pond, 205 townhomes and 40,000 square feet of retail/commercial space just off the White Horse Pike in Clementon, with an October groundbreaking slated; Cooper Towne Center in Somerdale; and rehabbing schools and building a new firehouse in Waterford Twp.

“These towns have the resources to do these projects, but we’re trying to provide an extension of services from a more ‘umbrella’ county standpoint,” Blanda says.

And with Cooper Medical School, Rowan University, whose main campus is in Glassboro, is inextricably linked to Camden. The latest news, according to Joe Cardona, Rowan’s vice president-university relations, is the integration of the School of Osteopathic Medicine in Stratford, once part of UMDNJ, with Cooper Medical School.

Also in Camden, Rowan acquired the historic First National Camden Bank building three years ago, and is now utilizing the renovated building for a combination of offices and classrooms.

Back at Rowan in Glassboro, Rowan Boulevard, a mixed-use partnership between the university, the Borough of Glassboro and private developers, continues to evolve. Following last year’s opening of the Marriott Courtyard, and the Enterprise Center, a four-story classroom, retail and parking facility utilized primarily by the College of Graduate and Continuing Education, several retail stores have opened, “creating a vibrant retail environment,” Cardona says. Additionally, a six-story, 400-unit residence hall with ground-floor retail is under construction across from retail anchor Barnes & Noble.

Rowan also garnered $117 million from the Building Our Future Bond Act, and “this fall, we will break ground on a new engineering building and a new College of Business Building,” he says.

“Our goal is to have 25,000 students by 2023 – right now we’re at 14,000,” he says. “That includes a big increase in online education. It is important for us to grow, because one of our foundational responsibilities is economic development. A prepared, educated workforce helps businesses in South Jersey, and helps attract businesses to South Jersey.”

Vineland, meanwhile, is gaining 45 jobs with the $32-million expansion of Canadian-based baker Bridor, Inc. The project, adding 47,000 square feet to Bridor’s existing 136,000-square-foot plant in Vineland Industrial Park South, is supported by a $5-million Urban Enterprise Zone loan.

“We were one of the first UEZs to start a loan program and the fund has been very instrumental in Vineland,” says Sandy Forosiskey, director of economic development. “In our new industrial park, we’re a subordinate lender on more than half of the businesses.

“We seem to have a niche in cold storage and food processing,” she says, noting Bridor for the latter. For the former, the past year has seen Lucca Freezers take over a shuttered ice arena and merge it into its existing building; RLS Logistics just completed a new cold storage facility; and First Choice, a freezer company, expanded.

Finally, Worldwide Glass is leasing to purchase in Vineland. Glass is also on the table in Oldsmans Twp., Salem County, where architectural glass manufacturer J.E. Berkowitz broke ground for a 53,000-square-foot expansion to its 200,000-square-foot headquarters in Gateway Business Park.

On the downside, the last remaining glassmaker in Salem City, bottle maker Ardagh Glass, will close its manufacturing plant this fall, a loss of 290 jobs, ending a 150-year tradition of glassmaking in the city.

Hopefully, the Paulsboro’s Port project, where wharf construction is imminent, and Holtec’s new plant, may provide some opportunities for those losing their jobs, notes SNJDC’s Asselta. “The impact of the Paulsboro Port development over the next 8-10 years will be significant.”

Other key infrastructure projects in the region, according to Asselta, are the Glassboro/Camden light rail line, “which has been pending for a long time – it’s in the environmental impact process”; and the Route 295/76/42 Direct Connect.

Regarding job creation in general, State Sen. Jeff Van Drew (D-1st Dist.) has proposed an Economic Task Force for Atlantic, Cape May and Cumberland counties. “It’s an excellent idea,” says Senate colleague Don Norcross. “Relating to the distressing news from Atlantic City, it makes perfect sense. The market has changed, and the region has to change with it. The best social program is a good job, and that’s what’s driving this proposal.”

Speaking of the economy, “it’s still sluggish, but much better than it has been since we peaked in 2008,” Forosiskey says. “We’re back to meeting with businesses, talking about expansion. We’re starting to see things happen.”

“The region is getting better,” says Perno. “I’m probably the most optimistic I’ve been about Camden in 20 years. Mayor Dana Redd has taken the right steps to correct the city’s financials and move the city into a position to welcome investment. The county and state have also done a great job of coordinating efforts with the city.”

“From a county standpoint, we measure based on the number of businesses hoping to expand and number of jobs created,” Blanda says. “Right now, things are getting better—we see a lot more construction activity, and that’s a good barometer.”

“We’re doing our part,” says Cardona. “We’re building buildings, partnering with people – Rowan has a major partnership with Lockheed Martin’s Moorestown facility. We will be doing research on laser/radar technology and will probably be able to build two more buildings at our West Campus to accommodate that research. From a South Jersey perspective, there’s more interest than ever in Rowan, in part because of our designation as a research university.”

“Many states are still recovering from the recession, and New Jersey is dealing with the hardship of tough economic conditions,” Palmieri concludes. “As the regional and national economies improve, that will create opportunities that will spill over.”