2.6 Billion dollar Revel Hotel & Casino

In his 1989 documentary Roger & Me, Michael Moore examined the demise of Flint, Michigan, after GM shuttered its auto assembly plants and moved them to Mexico. In an effort to revitalize the economy, the convention and visitors bureau set off with a plan to bring tourists to Flint and replace lost revenue. First building a Hyatt Regency hotel and then, Auto-world. An automotive based theme park, as well as, Water Street Pavilion, a festival market place.

There’s an old saying I learned while living in Alabama which says, “You can’t do business with folks who ain’t got no money.” A business analyst illustrated with a piece of paper folded into four quarters. “Some people want to do business with you and will,” As he tore off a quarter, dropping it to the floor. “Some people don’t want to do business with you, but could,” he explained, tearing off another quarter. “Some people want to do business with you but can’t, some people don’t want to do business with you, and won’t.” So even if you’re selling twenty dollars bills for five bucks, not everyone’s interested. Only a small percentage of all the business out there is actually available.

The first rule of Real Estate is location, location, location, so why not build a hotel and convention center in Flint? Why wouldn’t tourists flock to a Mecca of American urban decay to spend their hard earned entertainment dollars? Why not a crime inspired theme park, Ghetto World! (Where the roller coasters ain’t scary, but getting off is!) But remember, just because these attractions closed down, doesn’t mean that they were unsuccessful. Land owners made money, construction companies made money, architects, designers and the suppliers made money and in all probability, the politicians made money too.  The only people to lose on the deal were those people dumb enough to put up the money and in most cases… that was you and I.

Community block grants, redevelopment grants, municipal bonds and on and on, I saw this while living in Montgomery. In an effort to lure shoppers back downtown, the city used block grant money to erect concrete sun shields to shade the sidewalks. It didn’t fix the parking problem or change the fact, that air conditioned shopping malls were closer than downtown. Twenty years later, they used block grant money again, this time to tear the shields down, declaring them an eyesore; your tax dollars at work.

Montgomery has tried to lure tourists and has genuine attractions worth seeing, the problem is most tourists are headed to Florida and don’t want to stay the night in the Cradle of the Confederacy. It’s not that these plans are necessarily bad; the real question is, are they cost effective? Is spending a $1.00 to draw in .85 cents in revenue, a good idea?  Is it a good idea spending millions of dollars, putting the tax payers on the hook for profits which go directly into the pockets of developers? It means jobs! It always means jobs! Good jobs too! As a hotel maid or a desk clerk, a parking attendant or a security guard. Because once you’ve been to Montgomery and seen the sites, you’ll probably want to come back next year and see it all over again.

The Minnesota Vikings have been negotiating with the state and city of Minneapolis for a new football stadium. The Minnesota Football Stadium Task Force found, “when a [NFL] team wins, people’s moods improve,” and that personal income for residents of a city with an NFL team with 10 wins increases about $165 per year.” Following that logic, let’s build two stadiums or even three! I could use the money!  Clearly, building a billion dollar stadium guarantees a winning sports franchise, right? A $975 million dollar price tag with $348 million covered by the state and $150 million more, covered by a new “hospitality tax” in Minneapolis. So the Minnesota tax payers get $165 in promised new income, plus get to feel better about their lives, living in a state with a winning football franchise and only costing them $321.45 each! The state was to fund a portion of their share with (charitable gambling) i.e. lottery games. The revenue was estimated at $34 million annually in 2012, rising each year after. But strangely, as soon as the deal was inked the revenue forecasts were revised down to $16 million in 2013. A further study estimated revenues 2013 – 17 would fall to $1.7 million annually, a 95 percent reduction.

The Vikings principle owner is Zygi Wilf, a multimillionaire Real Estate developer from New Jersey. During all of the discussions and legal debates surrounding the new stadium, Wilf has been busy buying up adjacent properties. He’s planning on redeveloping the neighborhood; including a new light rail stop (tax payer funded, of course) 4,500 residential units, hotels, office space and retail space too! All dependent on funding supplied in part by the good citizens of Minnesota, who are to be paid back at some later date, profiting a very, very few, who’ll get paid today. This is what corporate Fascism is all about, public money supporting private projects to benefit the few, the well connected, the insiders.

It’s sort of like that movie, The Music Man where a con man comes to town convincing the rubes there’s a problem with their sports franchise. They need a new stadium and he selling stadiums! Convincing the rubes that if the children think they can make downtown prosperous, they can!

But in Atlantic City, the has music stopped, the 2.6 billion dollar Revel hotel and Casino will close next month, joining the Atlantic Casino which closed in January. The Trump Hotel and Casino closed in September and the Caesar’s Showboat Hotel and Casino which closed in August. Nearly 8,000 workers have lost their jobs in a city with over 13 percent unemployment. Moody’s rating service has cut the city’s bond rating to junk, on its $245 million in general obligation bonds. The fiscal Conservative, Republican Governor of New Jersey, Chris Christie, had pledged $261 million in tax incentives to the Revel hotel project, when he took office back in 2010.

The Georgia Dome in Atlanta will soon be razed to make way for a new stadium, to be partially funded by an Atlanta motel tax. The Georgia Dome opened in 1992, and underwent $300 million in renovations in 2006. Total costs for the new stadium are estimated at $1.2 billion, but hopes are high that a new stadium might bring World Cup soccer matches or maybe even a Super bowl.

Atlanta Journal Constitution – The Atlanta City Council officially approved the stadium on March 19, 2013. The council voted 11-4 in favor of the use of city hotel-motel taxes to pay $200 million toward construction costs and potentially several times that toward costs of financing, maintaining and operating the stadium through 2050.”

“Potentially”, that’s a dang scary word when used in the context of anything political, involving the word cost.

Meanwhile, back in Atlantic City, the finger pointing has begun, with accusations of flawed business models, increased competition and a soured economy. Where were these harbingers back in the golden shovel days? These hindsight oracles, who promised good times and better days, rivers of money, hurry, hurry, don’t wait or it might get away! If you build it they will come, they’ll pay $150 for a football ticket and six bucks for a beer. They’ll shop in trendy shops, because 70,000 football fans make shopping a pleasure. They will use their unemployment checks to buy those condos, while little old ladies gamble away their pin money trying to catch hold of the faux glamor on their Hoverounds, pretending everything is still alright in fantasy land. Or using the light rail stop to get to those new, good, if only temporary jobs, as ticket takers, ushers or concession stand operators, ten or twenty days a year… hot dogs! Get your hot dogs! Only nine fifty! Three for twenty five bucks!

Cross posted from: http://www.alifeahead.com/