July 2018

Hard Rock in AC Sounds Like a Sure Bet

By David J. Spatz

The old Trump Taj Mahal takes on a new name.

Want to see Jim Allen break into a smile?

 

Then go admire the newly opened Hard Rock Hotel & Casino Atlantic City that his company and its partners carved out of the remains of the tired, old Trump Taj Mahal.

 

Check out the massive property and see what half a billion dollars buys when you’re basically gutting a 30-year-old, 4 million-square-foot property, removing all traces of the Trump and Taj Mahal identities and making the place look like it’s been a Hard Rock since the very beginning.

 

Dine in one of the restaurants, some of which you’ll remember because they’re well-performing holdovers from the Taj Mahal days.

 

Stroll through some of the retail shops. Catch a big-name star performing in the 7,000-seat Hard Rock Live in the Etess Arena or the 1,500-seat showroom on the opposite side of the property.

 

Relax in the spa.

 

And, if you’re feeling lucky, play at one of the thousands of slot machines or dozens of tables on the 125,000-square-foot gaming floor.

 

Then tell Jim Allen, the Atlantic County native who runs the entire Hard Rock International empire, that you enjoyed the experience. If you can do it without mentioning the word “casino,” Allen will probably crack a smile.

 

That’s because he wants people to understand that despite offering gambling at some of its locations, Hard Rock International doesn’t consider itself a casino company.

 

“The Hard Rock brand is not a gaming brand. The name of the company is Seminole Hard Rock Entertainment,” says Allen, who is chairman, president and CEO of Hard Rock.

 

Hard Rock is a destination within itself, a place that’s fairly self-contained and capable of offering guests the experience of their choice, which doesn’t always mean gambling.

 

Allen, a graduate of Mainland Regional High School in Linwood who began his casino career as a short-order cook at Bally’s, believes his company’s success in a market where it has wanted to develop for years will – like many of the second and third waves of casino operators here – succeed where others failed for one simple reason: It isn’t carrying a heavy debt load.

 

Hard Rock International has a lot of Native American money in the project, not to mention what it’s getting from its partners, the Jingoli and Morris families, who are very successful contractors already involved in Atlantic City with the Gateway project.

“The Seminole tribe of Florida funded $400 million in cash [for the Atlantic City project],” Allen adds. “We do not have any debt on this particular project. That’s something that’s so unique.”

 

Hard Rock has partners in this project who aren’t strangers to the Atlantic City market.

 

At the opposite end of the boardwalk from the Hard Rock, Joe Jingoli and Jack Morris are the lead contractors for the $225 million Gateway project, which consists of an Atlantic City campus for Stockton University and the headquarters of South Jersey Gas.

 

“With our partners, we’ve come together for almost a 50-50 split on our equity now. We’re looking to take this to the next step,” Allen says. “But we’re truly committed to creating a world-class product. Hard Rock is not about gaming. It’s about entertainment.”

 


The newly opened Hard Rock Hotel & Casino is serious about live entertainment.

 

To drive home that point, several months before it opened, Hard Rock held a simultaneous, three-city press conference (New York, Philadelphia and Atlantic City) where it announced it would present at least 300 live shows at its facility during its first year of operation.

 

Then, as if to underscore how serious Hard Rock is about bringing more entertainment to town – and not just on weekends – the company announced 60 shows it had confirmed for gigs. During the weeks that followed the press conference and during the run-up to the opening, it added even more names to the mix.

 

Carrie Underwood christened its main venue, Hard Rock Live in the Etess Arena, on June 29. The following night, Pitbull performed in the room that’s been expanded from 5,200 seats to around 7,000.

 

Allen, who has long wanted to establish a Hard Rock presence in Atlantic City beyond the café it had in the former Taj Mahal, expects the brand to draws people to Atlantic City who have visited before or whose trips were very fleeting because they felt Atlantic City had little to offer beyond gambling.

 

That was the old Atlantic City of the casino era. The city that’s emerging now as the third wave of development and repurposing is a completely different experience.

 

“The one thing we are most confident about is that it will create the curiosity to come to Atlantic City,” Allen said.

 

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When former Taj Mahal owner Carl Icahn sold the casino he had closed during a labor dispute to a globally recognized brand like Hard Rock, the news seemed to come out of the clear blue. Many were surprised.

 

They shouldn’t have been. Ever since Jim Allen joined the Hard Rock team in 2001 to operate the Seminole tribe’s casinos in Florida, Allen has always wanted to see the familiar logo on an Atlantic City property.

 

When the Revel casino hotel closed in 2014, Allen admitted that Hard Rock kicked the tires of the $2.4 billion, 6 million-square-foot boardwalk monster to see if it would suit its purposes.

 

Long before that, though, Hard Rock was getting ready to break ground and claim one of Atlantic City’s two “boutique” casino licenses that would have created opportunities for developers to get into the casino business in Atlantic City without building enormous properties.

 

In 2012, Hard Rock was planning to create a 700-room hotel and casino, with its signature Hard Rock Live venue, on either side of the boardwalk at Albany Avenue on the spot where Stockton University is now putting up student housing for its new Atlantic City campus just across the street.

 

But just before it took the plunge, Hard Rock decided to hold off on the plans. Revel was planning to open what it was touting as Atlantic City’s game-changing hotel casino by creating what it called a luxurious cruise ship that would never leave the dock.

 

Its goal was to bring first-time visitors who had never considered Atlantic City as a destination resort.

 

But from the moment it opened, Revel never achieved its goals. It didn’t attract the first-time visitors and because its casino revenue wasn’t even close to expectations, the property sank even deeper into debt. It went through two bankruptcies and finally closed a little more than two years after it opened.

 

Hard Rock decided it probably wasn’t a good time to invest hundreds of millions in a boutique casino and it shelved the plans.

In hindsight, the collapse of Revel was probably the best thing to happen to Hard Rock. It had to wait several more years, but when the opportunity to grab the Taj from Icahn for peanuts on the dollar was created, it didn’t waste any time, especially since its partners, Jingoli and Morris, are contractors and could perform the work with their own companies.

 

“Don’t get me wrong, the Revel is a beautiful property,” Allen said diplomatically of the building now known as the Ocean Resort Casino, which was scheduled to open June 28, the same day as Hard Rock.

 

“We always felt the [Taj] was the better fit for what we wanted to do,” Allen added. “It better fit our purposes.”

 

Industry observers were surprised that Icahn sold the Taj to Hard Rock without a deed restriction preventing the new owner from opening a casino. When he initially closed the Taj, there was a no-casino deed restriction in place.

 

Initially, industry observers believed Icahn was betting on Hard Rock bringing new business to town, which would have ultimately helped his Tropicana Atlantic City, which is now second behind Borgata in monthly gaming revenue.

 

The experts believed Icahn wouldn’t have allowed Hard Rock to develop a casino at the Taj if he thought it would steal business from the TroBut several months ago, Icahn – who has a history of buying underperforming properties, building them back up and then flipping them – announced he was selling all eight of his casinos operated by Tropicana Entertainment, which includes the Atlantic City operation.

 

To outward appearances, the other casino operators in Atlantic City are welcoming Hard Rock to town. Mark Giannantonio, president and CEO of Resorts Casino Hotel, which is connected to the Hard Rock by a skybridge, is particularly happy about his new next-door neighbor.

 

“We’re not going to compete with them for entertainment and we aren’t even going to try,” Giannantonio, a career casino employee, said before Hard Rock opened.

 

But a property like that will be a magnet for visitors, he said, and Resorts is perfectly positioned for people to visit after they check out the Hard Rock.

 

The openings of the Hard Rock and the Ocean Resort casinos will provide renewed energy and life to that portion of the boardwalk, too, city officials have said.

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