Harrah's leads AC expansion wave

March 6, 2008 3:20:10 PM PST
Tightening credit markets and a worsening economy are worrying some in the Atlantic City casino industry. But a wave of casino-hotel expansions begun a few years ago is coming to fruition, and not a moment too soon. Harrah's Waterfront Tower, which debuted on Thursday, is the first of three major expansion projects that will open this year designed to add thousands of rooms to the Atlantic City

The 961-room Harrah's project will be followed in June by a new 800-room stand-alone hotel called The Water Club at the Borgata Hotel Casino & Spa. And by Labor Day weekend, a new 786-room tower at the Trump Taj Mahal Casino Resort should be open.

All those projects were begun about two years ago, before the economy started heading south. Thursday's dedication ceremony for the Harrah's project came less than two weeks after Pinnacle Entertainment alarmed some here by saying tightening credit markets might force it to delay or even abandon its plan for a $2 billion mega-casino on the site of the former Sands Casino Hotel.

But at the ceremony, in which Harrah's Entertainment CEO Gary Loveman helped Gov. S. Jon Corzine cut a ribbon, the mood was chins-up, and brave faces on, even while acknowledging the current financial turmoil.

"Despite the uncertainty in the credit markets, there are still a lot of people who want to invest billions of dollars here," said Linda Kassekert, chairwoman of the state Casino Control Commission. "While the availability of credit may have slowed things down, it clearly hasn't deterred people's interest in coming here."

In an interview after the ceremony, Loveman said Harrah's could have built its $550 million hotel expansion even in the current environment because it has the resources to pay for it without borrowing.

"It's a difficult time," Loveman acknowledged in an interview afterward. "I'm concerned about the economy impacting our business and all other businesses."

But he added, "I think Atlantic City has a bright future."

"There are now a number of customers here on the weekend that are not here for gaming. They're here for the spas and dining and entertainment," Loveman said.

R. Scott Barber, senior vice president and general manager of Harrah's Atlantic City, said the company has enough room to build two additional hotel towers in Atlantic City should it choose to do so.

Waterfront Tower is the tallest building in Atlantic City at 525 feet.