Company CEO James Allen said Hard Rock owns the world's largest collection of rock memorabilia. The museum planned as part of the company's casino at the south end of the Boardwalk should give people another reason to visit the nation's second-largest gambling resort, Allen told the New Jersey Casino Control Commission on Wednesday.
"When you look at the history of Atlantic City and its contribution to music, we felt this could be another reason for people to come to Atlantic City," he said.
Among items that are likely to be displayed there are memorabilia from when the Beatles and The Rolling Stones separately played Atlantic City, Allen said.
Hard Rock, which is owned by Florida's Seminole Indian tribe, is the first company to apply to build a smaller casino-hotel under a new law permitting them in New Jersey. The hotel would start at 208 rooms and eventually expand to 850.
The first phase of the project will cost about $465 million. Allen said he could not currently estimate a cost for the second phase, which would conclude with the 850 rooms.
Hard Rock plans to make more use of the beach than any casino ever has in Atlantic City: A pool, a cafDe for afternoon barbeques and an outdoor entertainment area that could host concerts are part of the proposal.
The commission accepted Hard Rock into its pilot program for so-called boutique casinos designed to jump-start new construction in the struggling resort, where casino revenues have been tumbling for five straight years. Allen said Hard Rock would not have been interested in coming to Atlantic City without the ability to start slowly and then expand over several years.
"The main reason this was attractive to us is it allows us to not write a billion-dollar check, which is basically impossible to finance anymore," Allen said.
That was the entire point of the boutique casinos bill, which was pushed by state Sen. James Whelan, the former Democratic mayor of Atlantic City. He said potential developers are interested in building in Atlantic City but feel the state has set the entry bar too high.
Previously, New Jersey law required at least 500 rooms. The most successful of the city's 11 casinos have 2,000 rooms or more.
The law authorized two such boutique casinos, but only Hard Rock has applied thus far. The casino commission extended the deadline for applicants for the second license to April 30, 2012.
Allen was asked why Hard Rock was willing to spend hundreds of millions of dollars on a new facility when it could have bought one of Atlantic City's numerous distressed casinos for less than a tenth of what it will spend on just the first phase of its project.
"There were five or six, maybe more, properties here that came to us saying, `Will you take us over, manage it, buy it?"' Allen said. "We said no. We think new construction is going to change the perception of Atlantic City. New is better."
The company expects to bring customers a heavy dose of celebrities, from the 3,000-seat entertainment center it would build to partnerships with charity-minded performers such as Jon Bon Jovi, Bruce Springsteen and Yoko Ono, among others. At the Hard Rock Hotel in San Diego, singer Fergie, of the Black Eyed Peas, helped design the employee uniforms, Allen said. Hard Rock typically makes a donation to the performer's favorite philanthropic endeavor in return for memorabilia, he added.
The first phase of the project is expected to create 2,000 construction jobs and about 1,500 permanent jobs.
Allen said he hopes to break ground by July 15 - about two months after the new Revel mega-resort is due to open at the opposite end of the Boardwalk - and finish the first phase of the project by mid-2014. The second phase would be started within two years of completion of the first phase.
Hard Rock is partnering with Och-Ziff Real Estate to do the casino project through a corporation called Gateway LLC.
Atlantic City's existing casinos are split on the concept of allowing smaller casinos into the market. Some say the new casinos will bring more people to Atlantic City. But others say it is unfair to those companies that have invested billions of dollars to allow newcomers to enter the market more cheaply.
Yet that is precisely what the bill aimed to do. To compensate for the lower price newcomers like Hard Rock will have to pay, the new casinos will be taxed at a higher rate than the existing casinos.
Hard Rock now has 120 days to pay to the state treasury $1 million, which would be forfeited if the project is not completed by established deadlines. That payment will be used to make infrastructure improvements in the neighborhood surrounding the project.