End of the Boardwalk empire? The rise and demise of Atlantic City

It’s raining on Atlantic City’s parade. Drops of water patter against the town’s wooden boardwalk as Mayor Don Guardian approaches four young women shivering in gowns. “Hello everybody!” he says. The fast-talking 61-year-old shakes hands with one wearing a tiara and sash reading “Miss Columbus”, from a beauty pageant to celebrate its namesake’s arrival in North America. Guardian poses with the group for pictures in front of a float bearing Italian and American flags. “Come on, big smile,” he says. “Like it’s sunny and it’s beautiful and you want to be here.”

This town of about 40,000 has a long history of keeping up appearances. It’s a resort, after all. For 30 years, casinos created a veneer of glitz and glamour along its seaside boardwalk. Though the promenade is quiet this blustery October Saturday, parade organisers motion for a handful of vehicles to fall in line. “Arrivaderci Roma” begins blaring from the float’s speakers, and the white-haired Guardian, wearing brown wingtips and a neon yellow raincoat, starts leading the procession south.

The parade begins from the Revel Casino Hotel, whose 709-ft tower brushes against low-hanging clouds. The gleaming glass complex was heralded as a sign of a revitalised boardwalk when it was built in 2012. The State of New Jersey even footed $260m (£160m) of its $2.4bn bill. But the casino declared bankruptcy twice, finally closing in September. Three others have also been shuttered this year, their unlit structures now voids on the boardwalk like teeth missing from a smile. Eight more casinos remain, though yet another closure looms.

Some have estimated the city will lose up to 10,000 jobs this year, though most casino workers live outside city limits, and a slice of those laid off will be rehired at other casinos. Still, thousands of residents are now unemployed in a town whose collective property assessment has almost halved since 2010. Atlantic City’s resulting fiscal quandary will come just as it grapples with the dual tasks of attracting a new brand of tourists and solving an old set of big-city problems. “Sometimes, you need calamity to get back,” Guardian says.

The parade passes the 1,331-room Showboat, a boxy structure whose subsequent floors rise from the boardwalk like a staircase. The Mardi Gras-themed casino closed in August, and vacancy has made its sand-coloured exterior look desolate. Just a few visitors brave the rain on this section of the boardwalk, where restaurants and souvenir shops fill the gaps between the hulking casinos. Fewer still stop to watch the small parade. Guardian doesn’t seem to notice, waving at onlookers and addressing by name the yellow-clad “boardwalk ambassadors” — like park rangers for the beachfront — lining the route. Casinos provided some relief for the city’s postwar economic malaise, Guardian says, but they created a far different challenge in the process.

“You got gambling, and you did become that auto town, you did become that mining town, or that factory town,” says Guardian, who was inaugurated in January. “[Politicians] put all the eggs in one basket. And it was easy enough to do because casinos were paying all the taxes. They gave people jobs.”

The strip of a city, 60 miles southeast of Philadelphia, isn’t so unique in this sense. Pittsburgh provided Americans their steel, Akron produced rubber, and Detroit churned out cars. Atlantic City, on the other hand, gave Americans what they want.

Such one-industry towns rode the wave of their enterprises to new heights, forgetting the very benefit of city living. Research has suggested the proximity of diverse industries encourages a sort of cross-fertilisation for ideas, what economists call “knowledge spillovers”. A local economy dominated by tourism — and then the narrower niche of casino tourism — has never allowed for that in Atlantic City.

“It has no reason to exist other than to be a resort,” says Israel Posner, director of the Lloyd D Levenson Institute of Gaming, Hospitality and Tourism at the nearby Richard Stockton College of New Jersey. “That’s what it always was, whether it was the pre-casino era, the casino-centric era, or the post-casino-centric era. We may dream that it’ll become a broad, diversified economy; that’d be nice. But it’s probably not going to happen.”

The lack of spillover makes itself all too apparent in a city design that encourages gambling and little else. Three casinos remain open near the marina across town from the boardwalk, far removed from most residents. Nine more — only five of them still in operation — and a convention centre line the oceanfront. But the properties are dislocated from the rest of the city by another block of parking lots, small hotels and vacant land. Visitors arriving via toll road from the north are first confronted not by the beauty of the Atlantic Ocean, but the immensity of Trump Plaza’s empty garage.

The challenge for Guardian, a Republican in a city of Democrats, is to help prop up a foundering tourism industry while modestly diversifying Atlantic City’s one-track economy. Remaining casinos are investing in non-gambling attractions, if they haven’t already. The city is scrambling to draw more live music, conventions and special events to its waterfront. The Revel Casino Hotel has been gobbled up for $110m — five cents on the dollar — and will likely reopen next year. Local leaders are in talks with nearby Stockton College to build a new campus on the site of the Showboat or Atlantic Club. The mayor hopes to demolish Trump Plaza when he can. His long-term goal is to entice cleantech companies with publicly owned land.

For now, though, Guardian realises the city is going to suffer. Despite cash infusions from the state, he has both slashed the city budget and increased property taxes 29% to bridge its deficit.

“For people on fixed incomes — seniors, people who have lost their jobs — the taxes are devastating,” he admits, comparing the rebuilding and rebranding efforts to a root canal. “And everything in the city is falling apart on them. But I tell them, ‘This is a transition, and I’m sorry. You got to realise it’s going to be better for our kids and grandkids. We got to make this transition.’”

For nearly 30 years, Atlantic City was one of the few places in the country where gambling was legal. That competitive advantage made the status quo enticing, even addictive. And tight regulations prevented the mafia from wetting its beak like it did in Las Vegas — the boardwalk was corporate territory. Gambling became the resort’s lifeblood within a decade of its legalisation in 1976, with casinos eventually paying 80% of property tax revenues and creating nearly 50,000 jobs. By 2000, more than two-thirds of Atlantic City’s working population was employed in the casino industry, according to a report by the Federal Reserve Bank of Philadelphia.

At the same time, however, other local businesses atrophied. Titanic casinos siphoned customers from smaller hotels, clubs and restaurants, killing a spirit of entrepreneurship within the local tourism industry. “Everyone dropped out and went to the casinos,” Guardian says. Ballooning tax revenues, he adds, helped foster a culture of poor governance.

“People are going to come by charter bus, they’re going to come by car, they’re going to come by limo,” Guardian says of the casino-era mindset. “All you got to do is get them in the properties, so you build parking garages. Now, it didn’t seem to make a difference whether there was a crime or no crime, whether the streets were clean or lighted.”

Even during this supposed Golden Age, local casino owners didn’t reinvest in their businesses the way their Las Vegas counterparts did. And few bothered to notice until it was too late. In the past 10 years, most boardwalk properties have grown increasingly worn, even dated, just as they faced growing competition from gambling in nearby states. Overall casino revenue here has fallen from $5.2bn in 2006 to about $2.9bn this year, despite a steady growth of non-gambling business.

The hardship will likely lay bare the city’s underlying socioeconomic struggles. Casinos’ economic windfall, however temporary, didn’t trickle down to many neighbourhoods removed from the boardwalk. Indeed, the influx of money and visitors put even more strain on a number of municipal departments.

“We’re a small city but suddenly we have big-city problems,” Pierre Hollingsworth, a local NAACP leader, told The New York Times in 1986. “The casinos bring in 30 million people a year and we must provide the fire, police, street repair and other services for them.”

Atlantic City has never solved those big-city problems. About 30% of residents lived below the poverty line even before this year’s closures, according to Census data. And the city’s unemployment rate this summer — the busy season — eclipsed 13%, more than double the state and national averages.

Most residents live north of the main drag of Atlantic Avenue, which once segregated white and black residents and now separates tourists and locals. Their neighbourhoods comprise mostly of rowhouses, low-rise apartment complexes and occasional single-family homes. More than 5,000 housing units are empty, the result of a 40% decline in population since 1930. Some of them have been boarded up with plywood; a few are so old they’ve begun falling apart.

Atlantic City didn’t always look like this. Founded in 1854, it was first marketed as a seaside health resort. The town has benefited from monopolies since its inception — the first, the Camden and Atlantic Railroad, allowed blue-collar visitors from Philadelphia to arrive en masse. During prohibition, local powerbrokers’ disregard for the law attracted not only partygoers, but also businessmen and organised crime. African-Americans poured in to find work, swelling the local population and becoming the backbone of the local tourism industry. Many residents still speak fondly of this era, swapping jokes about low-level political corruption.

“Atlantic City’s economy was totally dependent on money spent by out-of towners,” Nelson Johnson writes in Boardwalk Empire: The Birth, High Times and Corruption of Atlantic City, a history that helped inspire the popular HBO show. “Visitors had to leave happy. If they didn’t, they wouldn’t return … [The city] grew into a national resort by promoting vice as a major part of the local tourist trade.”

Atlantic City lost its second monopoly with the end of prohibition. And the remnants of the town’s postwar decline — blight from failed urban renewal projects, for example — provide glaring reminders of what could happen after losing its third. Guardian has begun paring down the municipal bureaucracy, improved public parks and fired up job placement programmes. He’s also attempting to draw development to places like the Northwest Inlet and Gardner’s Basin; quaint oceanfront neighbourhoods serving a clientele decidedly different from that of casinos.

The parade passes the 2,248-room Trump Taj Mahal, another monument to the good times. A judge recently voided a contract between Trump Entertainment and its 1,100 unionised employees at the casino, essentially nixing their healthcare and pension benefits. But corporate ownership still threatens to shutter the Taj — and put all of its 3,000 workers out of jobs — unless it receives a reported $175m in tax concessions and state aid.

People huddle beneath the casino’s boardwalk overhang to stay dry, some playing carnival games, eating hotdogs or inspecting street carts. Guardian, who’s been talking almost nonstop for more than an hour, pauses briefly as a vendor heckles him about job losses. But he soon continues moving forward, relaunching his description of the amenities — some of them gimmicks — that could help rejuvenate the town. Demolishing Trump Plaza is near the top of Guardian’s wish list, as it would create a walkable corridor from the stunning beachfront to stores a few blocks inland.

Just one week before, drunk casino-goers had stumbled through the area, now a fortress of fading white concrete. They walked south along Pacific Avenue as pale moonlight caught the red letters emblazoned atop the hotel’s unlit tower: “TRUMP PLAZA.” A few of the passersby stopped at the adjacent casino entrance, peering through its glass doors at an advertisement for the “Back In The Day Buffet”, which was still decorating an interior wall. Most, however, simply continued walking past Mississippi Avenue, a sidestreet that slices through the building.

The revellers didn’t seem to notice the three men working quickly and quietly down that dimly lit corridor. Dressed in brown overalls, the crew stacked slot machines into the back of a tractor-trailer. They were removing the casino’s organs. A bright red sign announcing Trump Plaza’s closure hung just feet away as the men toiled in the belly of the dead casino. Its body was still warm.