Atlantic City, New Jersey (AP) — Financing for two proposed mega-casinos worth USD 7 billion appears solid, and a third should still get built even if it is delayed by the slowing economy, Gov. Jon S. Corzine said Wednesday.
In an interview with The Associated Press, Corzine also endorsed totally smoke-free casinos, and said he would sign a law to keep gambling halls open if state government shuts down, so long as constitutional problems with doing that are addressed.
Last week, Pinnacle Entertainment said tightening credit markets might force the Las Vegas-based company to delay or even cancel its proposed casino-hotel project on the Boardwalk if credit remains tight.
„This actually is something I know something about,“ said Corzine, the former chairman of banking investment firm Goldman Sachs. He helped Pinnacle chairman Dan Lee push the plunger that demolished the former Sands Casino Hotel last October to make way for Pinnacle’s project.
„Markets go up and down,“ he said. „If they were coming to market today, the markets are not keen on highly leveraged transactions. Whether it be six months from now, a year from now, a year and a half from now, we certainly hope the markets provide windows of opportunity. I would expect that they will.“
As to the two other huge casino projects on the drawing board for Atlantic City, Corzine says both the USD 5 billion MGM Atlantic City development and the USD 2 billion Revel Entertainment project appear to be on firm financial footing.
„I know quite a bit about the financing plans of MGM; they’re pretty secure. I think Revel’s pretty secure,“ he said.
Corzine said he would sign a law designating casino inspectors as essential personnel able to work during a state government shutdown — provided lawmakers can come up with a way to square it with constitutional requirements involving borrowing authority and the definition of essential.
„The clause in the constitution is pretty explicit: When you talk about emergencies, it talks about things like acts of God, insurrections, things like that,“ his press secretary, Lilo Stainton said. „It says any work done during that time has to be essential to the health and welfare of the state. It’s hard to make an argument that the revenue of casinos is essential to the health and welfare of the state.“
A 2006 government shutdown resulted in the casinos closing for three days.
Joe Corbo, president of the Casino Association of New Jersey, said the state has to find a way to get such a law passed.
„It is counterintuitive for a state that is in a fiscal crisis to close an industry that generated USD 1.3 million per day in tax revenue,“ he said. „Even if there is not a state shutdown this year, non-closure legislation is critical.“
Corzine also said Atlantic City should not jump at the first offer it receives for the nearly 150-acre former airport property at Bader Field that’s being eyed for as many as four new casinos.
Penn National Gaming has offered USD 800 million for the land, and USD 100 million to cash-starved Atlantic City to use as quick property tax relief in return for being able to avoid a lengthy bidding process for the land. The company on Wednesday asked the city to consider zoning land along Route 30 for a casino it wants to build at the site of a former oil depot, in addition to its Bader Field proposal.
„I believe in open competition,“ Corzine said. „You have no idea if there’s a better opportunity out there or not.“
Concerning a total smoking ban, Corzine said he considers Atlantic City’s current ban restricting smoking to no more than 25 percent of the casino floor to be a temporary measure that will one day give way to a total ban. But he said he would not push lawmakers to enact such a ban right away; April 15 is the first anniversary of the new law.
He said new casino projects should proceed as if smoking were banned in Atlantic City.
„People shouldn’t be building under the assumption that they’re going to get this partial ban,“ the governor said. „That’s just temporary. I feel very strongly about moving forward with a total ban.“
As for gambling, the governor said he has never gambled in a casino.
„I’m not a gambler,“ he said. „I had a pretty high-risk focused job.“
Was he gambling on Wall Street?
„I wouldn’t call it gambling,“ he said. „We made probability judgments about the viability of assets.“