Boardwalk Empire: The Birth, High Times And Corruption of Atlantic City (47 page)

When Wes arrived at the Boardwalk that Thursday night, he was tickled by the festive atmosphere. Throngs of local residents, hotel workers, peddlers, and escapists (in other words vacationers) crowded onto the Boardwalk, all hoping to be part of a history-making event. Wes took it all in. “It was an escapist crowd but VIPs were being ushered around and street performers were out in force. A guy impersonating Frank Sinatra won the contest for eyes and tips. You could tell people were there solely for the spectacle of seeing the building come down.” It was a hodgepodge of humanity: young, old, black, white, brown, yellow, executive, and blue collar. People were dressed in everything from formal business attire to cut-off jeans. Some spectators wore face masks hawked by vendors to counter the expected dust. Everyone was enjoying themselves except Sands’ employees and loyal gamblers, who were sad to see the building go.

Pre-demolition fireworks paid for by Pinnacle Entertainment, which was to build a new
mega
-casino, washed the area in bright flashes of light, while a public address system blared Sinatra crooning “Bye Bye, Baby.” Shortly after 9:30
PM
, Governor Jon Corzine and Pinnacle chairman Daniel Lee—who was celebrating his 51st birthday—pushed a wooden-handled plunger attached to a wire leading to the building, igniting strategically placed explosives. Seventeen deafening booms, seconds apart, followed the first explosion. Less than ten seconds after the final detonation, the massive structure groaned and began collapsing on itself. The falling concrete, steel, and glass emitted a roar, with dust floating out in all directions.

Wes’ trip to Atlantic City met his expectations in ways he hadn’t figured on. “The event had the
vibe
of any other casino spectacle—until it happened. When it did, there was no denying it was real. The explosions were real. The building really went down. The skyline really was different. The Sands really was no more. And a crowd accustomed to phony spectacles was genuinely stunned. Then, the people and the dust scattered—and Atlantic City went back to business.”

Business, for Pinnacle’s people, meant carting away the debris and clearing several adjoining properties. When they were done, Dan Lee and company had a total of 19 acres of oceanfront property between Indiana and Kentucky Avenues. A huge open expanse in the heart of the Boardwalk was ready for new construction. The plan was to erect a $1.5 billion Las Vegas-style, world-class hotel resort to compete with the new Borgata Hotel Casino and Spa, which had opened in Atlantic City’s marina section in 2003. Joe Weinert of the trade publication
Gaming Industry Observer
termed Pinnacle’s venture the “talk of the town.” He predicted that within four years the site would be transformed into “a master-planned masterpiece stretching from the Boardwalk to Pacific Avenue.” With gaming analysts pronouncing the arrival of a “building renaissance,” Atlantic City was on the march—or so everyone wanted to believe.

Not accounted for were two obstacles capable of causing the town to stumble on its grand march into the future: one looming, the second ever-present.

Within months following the Sands implosion, “Wall Street laid an egg”—so said economic historian Niall Ferguson. Much has been written, and more will be, by scholars such as Ferguson, Paul Krugman, Robert Reich, and Michael Lewis. Nothing said here can add to their insights. Suffice it to say that Atlantic City’s gaming industry—along with many others—didn’t see the burst of the credit bubble coming. The turmoil in the financial markets will hinder growth locally and may push several casino properties into bankruptcy. Many observers believe that the over-leveraging of our nation’s economy, which was many years in the making, will take as long to resolve. Welcome to the new normal. Farewell to the Pinnacle.

Ever-present, but often ignored, is the “naked reality” of just how much work remains to be done to rebuild Atlantic City. Thirty-four years after the 1976 gambling referendum much of the town looks as drab and dismal as it did before the casinos came in. For portions of the population and segments of the city, it’s as if gambling never happened.

While the Casino Reinvestment Development Authority has funded important housing and commercial projects re-invigorating sections of the city, only one development—The Walk/Atlantic City Outlets—has been a game changer. In many parts of town the deterioration that started in the 1960s continues undeterred. There has yet to materialize a sustained effort to rebuild the entire city into a clean, safe, first-rate resort. For the past thirty-plus years, it’s been a hit-or-miss, piecemeal effort.

Numerous buildings that had fallen into disuse pre-casino gambling still haven’t found a purpose, and no one seems to know whether to permit them to continue standing or demolish them and create yet another empty lot. A threshold question to begin valuing any city’s real estate is to ask, “If the building occupying a site were to burn down, would the owner rebuild?” By that standard, large portions of Atlantic City have a meager value. A recent editorial in
The Press of Atlantic City
, commenting on real estate eyesores, suggested to local readers, “Drive through the city with a fresh set of eyes, see it for the first time as visitors do, and these buildings cast a bleak and ugly pall over the city trying to market itself as a glitzy, vibrant,
always turned on
resort.”

Two knowledgeable observers whose profession is to investigate and report on events in Atlantic City cast their cold eye in this direction to help assess where the resort stands today. If newspapers are the “first draft of history,” then investigative reporters Donald Wittkowski and Michael Clark are first-rate historians of the casino and political worlds that dominate today’s Atlantic City. Wittkowski spends his days scrutinizing every aspect of the casino industry. Clark’s beat is City Hall, and he probes for answers to the puzzle of local government.

Wittkowski finds no virtue in subtlety. “Atlantic City blew it. It enjoyed a monopoly as the only casino city east of the Mississippi for 14 years, yet squandered that time by failing to develop the jaw-dropping, Vegas-like attractions that would ensure gambling customers would keep coming back for more. Only one new casino was built from 1990 to 2003, an astonishingly long lull. Profits rolled in like waves from the ocean, so casino operators felt no pressure or need then to invest in rebuilding the city.”

With profits down, Wittkowski fears that more properties may go the way of the Sands. “Atlantic City gaming revenue has plummeted 25 percent, from a peak of $5.2 billion in 2006 to $3.9 billion in 2009. No one knows when it will finally hit bottom. Inevitably, there will be a shake-up. Vanishing profits, competition, and a still-fragile economy will force weak casinos to close.” Wittkowski believes a turnaround is possible but it will take many years and require committed leadership from both the casino-hotel industry and City Hall.

Clark’s take on City Hall is every bit as unsettling. “City Hall has been a place where potential goes to die. Whether newly elected officials with promises of change or a project to revitalize a neighborhood, the promises broken here reverberate throughout the city. And in all the discussions about combating the city’s challenges from growing gambling competition, local government’s problems are no longer part of the conversation. They’re accepted as an unavoidable fact, the
That’s-City-Hall-for-you
excuse.”

As Clark notes, “City Hall’s failings have a major affect on Atlantic City’s hopes to be a premier resort. The city has one of the highest ratios of employees to population in the country—a direct product of the endless cronyism that has dominated City Hall since the early 20th century. The mantra continues like a drum beat, ‘How do I get my piece?’ With so much money tied up in salaries, there’s little left for infrastructure, which continues to slip into disrepair.”

Wittkowski’s and Clark’s assessments may be grim but they aren’t surprising.

From this observer’s perspective, the challenges facing the resort are just history playing out. Atlantic City remains an experiment in social planning. Today, as was true when Jonathan Pitney founded his resort more than 160 years ago, the only reason for the town’s existence is to provide leisure-time activities for visitors. Today as then, repeat business by vacationers and conventioneers is critical, but the heady days of the 1990s when the casino industry was like a money factory are gone. One needs look no further than the empty Pinnacle site—19 acres sitting idle—to see that things have changed.

Also true today, as it was in the era of Nucky Johnson, is that this city has yet to embrace the customs and practices of most local governments for the exercise and transfer of power. Nucky’s legacy of machine politics has been replaced by an endless free-for-all among politicians hoping to be the next boss, who use the city’s payroll to swell the ranks of their supporters. Despite its corruption, the “Boardwalk Empire” of the Kuehnle/Johnson/Farley machine delivered essential municipal services in a competent manner. That can’t be said today.

Complacency is fatal for a town like Atlantic City. Keeping the experiment prospering and re-imagining an empire (this time a partnership of community leaders and casino-hotel interests) requires each generation of leaders to develop a vision for accomplishing the town’s singular mission.

All the pieces for a “renaissance” are here: the mighty Atlantic Ocean, beautiful beaches, the world famous Boardwalk, easy access by more than one-fourth of the nation’s population, a modern convention center, a first-rate entertainment venue in Boardwalk Hall (part of Nucky’s complex legacy), institutions of higher learning eager to share their knowledge, the building trades required to finish reconstructing the town, and most important, a skilled hotel workforce capable of making a hotel-resort economy operate with grace and efficiency. The only pieces missing from a formula for success is enlightened leadership and a sense of urgency, the likes of which propelled the adoption of the 1976 gambling referendum. When those two pieces emerge, Atlantic City will be on its way to once again becoming a premier resort destination.

SOURCE NOTES

To avoid cumbersome footnotes interspersed throughout the text and still provide the reader with my sources, I have utilized the practice of reference to particular passages by page number, here at the end, rather than with breaks in my narrative. Hopefully, it will be easier on the reader’s eye. These Source Notes list the personal interviews, newspapers, magazines, books, public records, studies, journal articles, and treatises that were the most influential in shaping my perspective on Atlantic City’s history.

Due to personal and professional commitments, my research spanned two decades. Within a short time of beginning my interviews I quickly realized that I was in a race against death. So many of the key players were along in years that I feared I might never get to the most knowledgeable persons. I was fortunate to speak with as many as I did. More often than not, repeat visits were necessary. Sometimes these additional visits were to confirm what other persons had said, other times to test the accuracy of my perspectives as they evolved. Interestingly, some key people opened up to me only after several visits. The more some people knew of what I had learned, the more willing they were to talk to me. A few, like Dick Jackson and Murray Fredericks, initially spent most of the time asking questions and didn’t answer many of mine. They were testing me. As Dick Jackson said at the beginning of our third meeting, “Now that I know you’ve done your homework and are serious about this, we can talk.”

Prologue

The vignette of the housewife/summer laundress and her visit with Nucky in his suite at the Ritz is based upon an interview with Mary Ill, long-time Atlantic City resident, active in local politics and charity groups, before the Great Depression and the social welfare programs that it spawned. Mrs. Ill’s story was confirmed and recounted by several other persons with tales of similar incidents.

Chapter 1: Jonathan Pitney’s Beach Village

The “early” history of Atlantic City was fun to research. There are surprisingly good sources available at the Heston Room of the Atlantic City Library and at the Atlantic County Historical Museum in Somers Point.

1      
enjoy civil and religious liberty
… taken from a biographical sketch written by Allen Brown entitled,
Jonathan Pitney, M.D.: Fifty Years of Progress on the Coast of New Jersey
(Daily Advertiser Printing Company, 1848).

2      The description of “
Further Island
” found at pp. 2–3 relies, in large part, on the work of Sarah W.R. Ewing and Robert McMullin,
Along Absecon Creek: A History of Early Absecon, New Jersey
(C.O.W.A.N. Printing, 1965) and William McMahon’s work in
So Young … So Gay!
, (South Jersey Publishing Company, 1970).

5      “
Railroad to Nowhere
” was a term used many times contemporaneously with Pitney’s efforts and by several historians. See S.W.R. Ewing and R. McMullin, Ibid., and Arthur D. Pierce’s work on the Richards Family, which was a powerhouse in South Jersey for several generations,
Family Empire in Jersey Iron: The Richards’ Enterprises in the Pine Barrens
(Rutgers University Press, 1964). The chapter entitled “Railroad to Nowhere” pp. 225–240 is an excellent recount of Samuel Richards’s efforts in making Jonathan Pitney’s dream a reality.

7      
… looked like a bank president …
A.D. Pierce,
Family Empire,
p. 226.

8      The initial investors in the Camden and Atlantic Railroad are discussed by A.D. Pierce, Ibid., p. 228.

9      
… a weird, wild look, a veritable desert …
These first-hand observations are of Richard Osborne, the civil engineer who laid out the Camden and Atlantic Railroad, speaking at its 25th anniversary dinner in June 1879. S.W.R. Ewing and R. McMullin, Ibid., p. 135.