Shore Tsunami

The Revel casino, where an auction is scheduled for Thursday. Showboat and Trump Plaza also face possible closing in the weeks ahead, threatening ripple effects for countless businesses.
The Revel casino, where an auction is scheduled for Thursday. Showboat and Trump Plaza also face possible closing in the weeks ahead, threatening ripple effects for countless businesses. (TOM GRALISH / Staff Photographer)

As 6,500 workers from three A.C. casinos await word on layoffs, a wider area braces for economic disaster.

Posted: August 04, 2014

ATLANTIC CITY - The fallout over mass layoffs from three potential casino closings next month could have a severe impact on the Shore economy, as those whose livelihoods depend on a thriving casino industry brace for the worst.

Local retailers, restaurants, and other businesses that rely on casino workers are expecting a hit. Experts say the region could also see an exodus of laid-off workers, especially among those who live in Atlantic City, as they seek jobs and futures elsewhere.

About 6,500 workers from Showboat, Trump Plaza, and possibly Revel could all lose their jobs from Aug. 31 to Sept. 16 - adding to the 1,700 who were let go in January when the Atlantic Club casino-hotel closed.

The number of layoffs "will have a detrimental rippling effect upon the regional economy, especially along the Shore," said Don Moliver, dean of the business school at Monmouth University. "Even with unemployment benefits to soften the personal impact, there will be far less discretionary income in the households, resulting in greater difficulty in making ends meet.

"Making rent, mortgage, car payments on a timely basis will create difficulties for many," he said, "and less discretionary funds mean less dining out, less trips to the Shore, less fast food, arcades, putt-putt golf, and the like."

He estimates the losses could easily run in the tens of millions of dollars, including to businesses that are forced to cut back on merchandise and lay off staff.

"Overall, the impact will be adverse," Moliver said. "Those who are chronically impacted may be forced to consider retraining themselves and/or relocate."

The suburbs that form a ring around the resort - including Galloway and Egg Harbor Township - are home to more than half of all casino workers. They own homes, shop, and eat in the communities.

"It's going to be a disaster," said Robier Soliman of Galloway, who operates a limousine service that caters mostly to the casinos. "With 6,500 people out of work, you'll see a higher rate of crime, drugs, and foreclosures. Another Detroit."

None are likely to feel the heat more than the small mom-and-pop operations that lack the cushion of a national chain to help weather tough times.

"We're waiting to see what happens," said Mercedes Noten, 78, who owns Bob's Home & Garden Showplace in Egg Harbor Township, with her husband, Bob, 90.

They opened the store 50 years ago when there were no casinos, and expanded to what is now 10 acres as the casinos fueled the region's growth.

"Depending how much sales fall off, it will affect how much we grow for next spring," Noten said. "There may also be cutbacks in hiring, and we may be laying off some."

Noten said she even plans to hold back from hiring extra help - usually six to 10 workers by the end of September - to handle the Christmas rush.

"It's going to affect every department store, every gas station," Noten said. "If [casino workers] had an extra $100 to go shopping for things other than food, now they'll have $20."

A large contingent bought homes in Egg Harbor Township, which ranks second only to Atlantic City in the number of resident casino workers, according to 2014 zip code data from the New Jersey Division of Gaming Enforcement. Galloway, Pleasantville, and Mays Landing round out the top five. Fifty-nine percent of the resort's 32,000 casino workers live in these five towns.

"No one will be building a home here," Noten said of Egg Harbor Township, which sits five miles from Atlantic City. "Anyone that bought in the last 10 years will be selling their home to move elsewhere to get a job."

Leaving Atlantic City

There's almost an apocalyptic mood in Atlantic City, where the resort is talked about in pre- and post-2006 terms.

That was the Shore casinos' best year, generating $5.2 billion in gambling revenue and when traffic was nonstop, year-round. That figure dropped to $2.9 billion last year, along with the vehicles.

"I did good money in 2006," said Soliman, the limo driver, of when he worked as a bartender at Trump Plaza from 2002-10. He started the limo service two years ago when the casino tips were no longer enough to live on.

Back in 2006, "you could see traffic at least five miles down," he said. "And now? Pacific Avenue is all empty. Only a big event, like a big-name singer, draws people here."

Soliman, 36, who's dating a Borgata Babe - a cocktail server at the city's top-grossing casino - said they may move to either Florida or California.

"She's not making any money . . . ," he said. "We're thinking of leaving."

Politicians have been busy attending rallies by Unite Here-Local 54, the union that represents most casino workers, since the closings were announced this summer.

As he marched alongside Showboat casino workers last month, first-term State Assemblyman Vince Mazzeo (D., Atlantic) recognized some of them. They are regulars at his family's grocery in Northfield.

"I realized our own business was going to be affected," he said. "When people get laid off, they become very selective on where and how they buy things."

Cocktail server Ramona Karatzas, 49, is among 2,100 losing their jobs at Showboat. She used to shop once a week at the ShopRite at the intersection of Jimmy Leeds Road and Pitney Road in Galloway.

"I'm down to once a month, just to get the bare minimum," she said, since getting a layoff notice. The mother of three also recently got divorced and has put her Galloway house up for sale.

"With the casinos closing, no one is shopping right now," she said. "Everyone is saving what money they have. For many of us, this was our lifelong jobs and won't be able to find something else."

Showboat plans to shutter on Aug. 31, and Trump Plaza Sept. 16. Both Showboat and Revel could stay open if they land buyers by the end of the month. Showboat is still seeking a buyer, while Revel will be auctioned off Thursday.

But the casino glut along the East Coast may prevent all three from being saved.

"Unless things change, I don't see much of a future," said Yehia Farid, 58, of Ventnor, who's been driving cabs in Atlantic City the last 20 years and has seen his fares sliced in half since the late 1990s.

Farid has sat outside Trump Plaza since 1997 because of its location. He knows he'll soon have to find another spot.

"I'm not sure yet what to do," he said. "I'm not comfortable sitting anywhere else."

Less work to go around

With fewer casinos, attorney John Donnelly expects less work for his Atlantic City law firm, Donnelly-Clark.

Donnelly has worked for every A.C. casino since the late 1970s. He was the one, on behalf of Trump Plaza, who dialed up gaming regulators and county politicians on July 11, to alert them of layoffs and the casino's closing.

"I was depressed all weekend," he said.

There was a cruel irony to the calls. When he was just starting his legal career at 26, Donnelly assisted gaming regulators in setting up New Jersey's first dealer school at Resorts in 1977, a year before it opened as Atlantic City's first casino. A number of graduates went on to become top casino executives.

"It was a great and wonderful thing with people getting jobs," he said. "This is the opposite side of that coin."

Adding to the anxiety, Atlantic City residents just received bills with a 32 percent hike in the city's tax rate, which comes on top of last year's 17.5 percent increase.

"If people can get out, they'll get out," Donnelly said. "As taxes go up and the [residential] base goes down, it will drive other businesses into the ground."

Mohammed Siddik, 34, bought Cali's Foods at 2701 Atlantic Ave., in January as his "Plan B," just in case he lost his valet job at Tropicana. His brother-in-law, Mahamudul Mozammel, 29, who got laid off from his marketing job at Tropicana last year, works the store's cash register.

"Everybody is in a fight for survival, working two or three jobs," said Siddik, of Chelsea Heights, as he stocked shelves near midnight recently. He can relate - after his casino day job parking cars, he tends to the grocery until 2 a.m.

The impact could extend to the malls. Payless Shoe Source at Hamilton Mall in Mays Landing sells specialized casino work shoes and is projecting lower sales after the shutdowns - and so are others. Some supervisors observed that casino workers are now coming in asking for job applications.

Sara Persiano's father, who works in player development for Revel, could be among those seeking another job.

Her father has been looking, "but he's hoping it [Revel] stays open," said Persiano, 17, a food runner at Ventura's Greenhouse Restaurant in Margate. "I hope they can all stay open. A lot of people's lives are in jeopardy."


sparmley@phillynews.com

856-779-3928 @SuzParmley

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