The casino industry in Atlantic City, N.J., has been taking some serious financial hits lately. The economic downturn several years ago, coupled with a marked increase in the number of casinos opening in Pennsylvania, New York, Connecticut and Delaware, have cut dramatically into Atlantic City’s gaming business.
Last year, four casinos on the city’s famed Boardwalk closed their doors, including the Showboat Casino Hotel at the north end of the boardwalk. Although the Showboat, owned by Caesars Entertainment Corp., was a profitable venture, Caesars closed it to reduce both its debt and competition for its three other casinos.
The shuttering of the Showboat, Revel Casino Hotel, Trump Plaza Hotel in Atlantic City and The Atlantic Club Casino Hotel left the already economically depressed area reeling. Prospects for the return of any lost jobs and tourism dollars looked bleak.
However, a ray of hope emerged before the year ended. A new owner was found for the Showboat, and part of it will remain a hotel.
Stockton College—formally known as Richard Stockton College of New Jersey—has bought the hotel and plans to convert it to a branch campus. The college, located in nearby Galloway Township, also will operate part of the building as a hotel with nearly 500 rooms. The hotel may open as early as this spring, according to administrators.
The rest of the structure will become Stockton-Island Campus. It will house more than 800 students and include dining and recreational facilities. It also will be the site for several academic programs, including the Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism and the William J. Hughes Center for Public Policy.
Apparently, there aren’t any plans to resurrect the Showboat’s casino; the gaming floor is slated for academic and administrative offices.
As with any financial venture, Stockton College is taking a gamble. Will it be able to attract enough students to the campus for the move to make sense?
Whether or not the decision pays off, there is no doubt that it is a short-term win-win for an area that could use an economic shot in the arm. Hotel space will again be available, helping to keep hotel rates relatively low and attract more tourists to the area. At least some of the jobs that were lost with the hotels’ closures will return, the college will be able to expand its programs and attract more students, and the city and state will still be able to collect their cuts—the hotel and retail portions of the property will be subject to taxes.
All this for a mere $18 million—the amount the college paid Caesars for the property. To put that number in perspective, the college spent $48 million in 2008 to build Housing 5, a residence hall that holds less than half the students that the refurbished Showboat will house. What’s more, neither tuition nor room and board plans are expected to increase as a result of the purchase.
“With the area’s tourism-based economy still recovering from the effects of the economic crisis, ‘Superstorm Sandy’ and the proliferation of gaming in other areas, Stockton will prove to be a distinctive investment,” said Stockton President Herman Saatkamp in a news release.
For the foodservice industry, the acquisition of the Showboat should provide the college’s hospitality and tourism management students with a valuable learning lab that should benefit the industry for years to come. That’s a gamble worth taking.