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Builders Revel in region's promise To help resort succeed, focus turns to adding housing to South Inlet

By , - Last modified: September 4, 2012 at 12:02 PM
Chip Pressman says his firm acquired the first pieces of a parcel near Revel a decade ago, but Lazocean Development waited for the casino to at last open before beginning work on a residential tower there. Pressman stands before the Boardwalk lot where he wants to build.
Chip Pressman says his firm acquired the first pieces of a parcel near Revel a decade ago, but Lazocean Development waited for the casino to at last open before beginning work on a residential tower there. Pressman stands before the Boardwalk lot where he wants to build. - ()

Next to a coveted piece of beachfront property alongside Revel, patience might be the most valuable asset Lazocean Development has. The Cherry Hill-based firm first acquired pieces of the one-acre site about 10 years ago, but held off on plans to build a residential tower until the long-awaited resort opened its doors.

"Without Revel developing what they did, we'd be sitting there not doing anything," said Chip Pressman, a principal of Lazocean Development. "They were the impetus for us to move forward with our plans on the property."

Pressman's project — The Metropolitan at Revel Beach — could be among the first new developments to take shape near Revel, the $2.4 billion resort casino that opened in April after years of delays. And state officials hope there will be more to come: the Casino Reinvestment Development Authority has plans to revitalize the ailing district around the gleaming property, starting with a park system and an academic campus to attract new investment.

The agency, which oversees the state-run Atlantic City tourism district, already is working to finance its plans. Under an agreement struck in June, CRDA can borrow up to $50 million through the state Economic Development Authority for projects around the South Inlet neighborhood Revel calls home.

The pact calls for CRDA to repay the loan using future sales tax revenue from Revel, but Executive Director John F. Palmieri said having the cash up front will speed its plans for the area. The authority will use the funds to acquire and raze several blighted buildings in a five-block area, making way for the inlet redevelopment.

CRDA's plan calls for creating "a linear parks system" beyond Absecon Lighthouse, Palmieri said. The network would ultimately span several acres from the Boardwalk to a few parcels west of the lighthouse park, creating a key building block "to encourage private-sector investment."

Another piece for attracting new growth in the precinct would be the presence of higher education. While discussions are preliminary, Palmieri said, officials with CRDA and Stockton College have considered a satellite campus with up to 50,000 square feet of academic space and a residential component with about 400 rooms.

The project, though far from a reality, "is more than a concept," he said. The parties have considered a site at Pacific and Connecticut avenues — barely a block north of Revel's property — with a "rough estimate" that puts the cost at $70 million or $80 million.

For Revel Entertainment, which helped craft the long-term redevelopment plans, one major goal is to bring more residents to the South Inlet. CEO Kevin DeSanctis called an academic campus a good start that could lead to residential development.

"We need people who live here and walk around here," said DeSanctis, who has long-term visions of a dining, retail and entertainment hub for the neighborhood. "In most vibrant cities, you have people walking around."

CRDA's plans would require residents of about 60 homes to be displaced from the South Inlet, and it plans to use a piece of its EDA loan to pay for relocations. Atlantic City Mayor Lorenzo Langford, a CRDA board member, said he will watch closely to ensure the state is "doing right by the residents" who will be moved.

South Inlet is in need of redevelopment, he said, but if residents "were to be moved out of Atlantic City, and then you build new housing to bring people in, what's your net gain?"

He also questioned whether "campus housing would be the best fit," citing the need for options with broader appeal, like a movie theater or bowling alley.

Beyond the park and education components, Palmieri said the agency hopes to make waterfront improvements that would "create a more contiguous connection" for pedestrians between the Boardwalk and Gardner's Basin, the popular maritime village at the northern tip of the inlet.

CRDA's effort to revive the South Inlet predate Revel's opening: The authority spent some $45 million on roadway and infrastructure improvements around the district in anticipation of the resort, Palmieri said. And while Revel has disappointed analysts since opening five months ago — it posted a $35 million loss in its first three months — stakeholders hope it becomes a cornerstone of Atlantic City's rebirth.

The casino, in turn, is expected to partner with the state in funding the improvements to the area. Aside from paying CRDA $5 million in annual sales tax revenue, state officials said the company has committed to financing new development and recreational projects through payments from a $261 million incentive grant, which will come in the form of reimbursements for future tax revenue.

DeSanctis said the grant will be a critical financing tool for the company on a long-term basis. In the near term, he said, the state's current efforts are starting to "set the parameters" for attracting outside interest.

"You're looking for private investment," DeSanctis said. "And once folks who are looking to participate in something like this can visually see the way the plan is taking shape, I think it's much easier for them to invest."

One investor has been Pressman's firm, Lazocean Development, which in March had its land-use application approved by CRDA's board. The project still requires other permits, but Pressman said he hopes to start construction within a year.

Plans for the beachfront property call for a 124-unit residential high-rise with retail, lounge areas and a robotic parking system for 250 vehicles. Ahead of construction, Pressman said he was encouraged by CRDA's support and plans for improving the area, adding that he hopes to "expand on the tone that Revel set."

"Everyone wants to see more development out there," he said. "That's why the state of New Jersey helped Revel to get finalized. People didn't spend all that time and effort to improve Atlantic City to not attract development."

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. Email him at joshb@njbiz.com.

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