Atlantic City Weekly

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Since the implosion and cleanup of the Sands in Atlantic City, Pinnacle Entertainment, the owner of that city block, has done nothing to improve that area. Workers had removed portions of the sidewalk and street lights on both Indiana Avenue and Dr. Martin Luther King Boulevard, but nothing has been done to improve the inner portion of the site. Over the past couple of years many complaints were sent to City Hall urging that the site be cleaned up.

I am happy to inform you that if you drive by the site you will now see there are heavy vehicles on the ground there working to enhance the area. After much pressure by members of Atlantic City’s City Council, as well as the director of the Neighborhood Services Department, an agreement has been reached for Pinnacle to replace all the torn-up sidewalks and the streetlights that had been removed. In addition, topsoil will be brought in and hydro-seed will be used to bring up grass. The total cost for making the ground presentable is about $1 million. Pinnacle has hired the city’s Special Improvement District to oversee the redevelopment of the block. It is anticipated that the job will be concluded within a six-week period.

It was a long hard fight, but a necessary one. Many of us had hoped that the ground could be used as a parking lot, but Pinnacle officials said that would be too costly. The ground is still up for sale and hopefully someone will come in to develop it.

Loveman on the Gaming Industry

“We set ourselves up for one hell of a party, and we had a lot of fun. We did a lot of fun things. One might argue that we did a few things to excess. And then we woke up the next morning and our heads hurt, things were a little disheveled. It was hard to find some of the folks we had been with the evening before. And now we find ourselves searching for a new equilibrium in a more demanding period.”

These were the opening remarks that Harrah’s Entertainment CEO Gary Loveman made during his speech at the Financial Executives International Leadership Summit held at Caesars Palace in Las Vegas, as reported in a story in the Las Vegas Sun on April 26.

Loveman also said the gaming industry outperformed virtually every industry in the years leading up to 2007. The regulatory environment was liberalized, he added, and there were major advances in gaming equipment technology and the industry thrived in an environment of abundant and cheap capital. But then the industry became obsessed with investing in the luxury market. When companies tilted their portfolios to the luxury end, it got harder and harder for companies to pay bills, according to Loveman. And as a result, there was “stranded capital” everywhere as buildings weren’t finished and roads weren’t paved. At the summit, Loveman predicted that casino companies would now focus on software rather than hardware as they work on attracting more customers and use low-cost methods to keep customers at their properties.

Loveman also pointed out that several states and local governments viewed gaming as a tax-revenue generator and initiated outrageously high tax rates. Maryland, he said, imposed a 67-percent tax and placed it on revenue, not profits. The high tax rates did little to encourage investment in high-end facilities.

Loveman pointed out that Harrah’s recently rolled out a simple low-cost tactic with its new Buffet of Buffets program, which offers one-cost, 24-hour access to any Harrah’s property buffet. The idea is to keep customers loyal to the company’s properties.

Other highlights from Loveman’s presentation included points about how the gaming industry will seek more opportunities in Asia; Harrah’s is seeking entry into Macau and owns a golf course there.

In response to a question about what Harrah’s property is most profitable, he said its highest return on investment normally occurs at properties most often considered low-end entries, such as Harrah’s on the Strip. He said there are some domestic growth opportunities for Harrah’s, but the high-tax environment will prevent it from making large investments. Loveman views Ohio and Massachusetts as potential opportunities, he said.

The company also plans to press for legalization of online poker. Harrah’s owns the World Series of Poker franchise.

Redevelop Atlantic City

The following are recommendations made by Tom Cantone, former VP of entertainment at Trump Entertainment and the Sands and now senior VP of sports and entertainment at Mohegan Sun, to enhance the future of Atlantic City: “With new blood at the top, [the city needs] a leader who represents new core values, [and who will] return the view of the ocean from the Boardwalk, clean up storefronts on the [Boardwalk] to look like Disney’s Pier, have each state sponsor their namesake [street, such as] Kentucky Avenue, Indiana Avenue, etc., bring back Miss America and [have] major name concerts on the beach, offer sports betting to counterpunch table games surrounding Atlantic City, and lastly, make it the ‘Safest Town in America’ and promote it as such.”

New Stores on The Pier

Rumors abound about the future of The Pier Shops at Caesars. Let me inform you that The Pier is here to stay. Negotiations are underway as to the sale of The Pier Shops at Caesars. Several stores have moved out, however several are also moving in. Here are three new stores that will soon open there: Cameo Water Wear; Shoe Be Doo, a new shoe store; and A Lady of Comfort, a new boutique store featuring ladies shoes and accessories. We have been told there are more to come. Stay tuned.

Pinky’s Corner airs Monday through Friday from 4 to 6pm on News Talk WOND-AM 1400. His TV show, WMGM Presents Pinky, airs Saturday at 7:30pm on TV40. Pinky’s e-mail address is: pinky@acweekly.com.