Image: Pier Shops at Caesars
Harrah's
It's no accident that the Pier Shops at Caesars bear a striking resemblance to the Forum Shops in Las Vegas—the same company designed both.
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updated 8/19/2008 3:51:58 PM ET 2008-08-19T19:51:58

At one time, Atlantic City was the East Coast's premium seaside vacation destination. In the 1980s, thanks to casino gambling (which was only legalized in 1978) and Mike Tyson's world-famous title bouts, Atlantic City went after Las Vegas' glitz-and-glamour crown. To no avail. In the early '90s, Atlantic City’s shine became tarnished, and the economy slumped. Seagulls overran the boardwalk, several casinos became embroiled in lawsuits, and its concert halls booked lounge acts from a long-forgotten AM-radio era.

But Atlantic City’s losing streak may be over. With the help of billions of investment dollars, this seaside city is being reborn. Strolling down the famous boardwalk, it’s obvious from the scaffolding and cranes that a new era is afoot — an era marked by massive investment, renovations and developments. In the last year alone, the area has seen nearly $3 billion in construction projects. Atlantic City is slowly shedding its checkered past and entering a new heyday, one that could be defined by luxury and style.

“Atlantic City has gone through so many phases,” says Elaine Zamansky, manager of media relations at the Atlantic City Convention and Visitors Authority. “Four or five years ago, the feel of the town changed again.”

It started in 2003 with the Borgata, the 2,000-room luxury casino hotel and spa that was the first new Atlantic City hotel and casino property in 13 years. It was an immediate hit, and has been among Atlantic City’s most financially lucrative casinos since opening day. In the fourth quarter of 2007, the Borgata raked in $54.8 million in gross operating profits, according to the Associated Press. Harrah’s Atlantic City was second, by comparison, cashing in with $38.1 million.

Encouraged by the Borgata’s success, Boyd Gaming and MGM MIRAGE opened an addition, the Water Club, in July 2008. Adjacent to its predecessor at Renaissance Pointe, the $400 million Water Club is the city’s first new major boutique-style hotel. Whereas some of the aging casinos can seem dated and kitschy, the Water Club is contemporary and stylish. “Atlantic City has a stigma,” says Daniela Il Grande, a Dean & DeLuca event manager who recently spent the weekend with friends at the Borgata property, “but the Water Club was really impressive. This is not the same Atlantic City that I remember.”

Even more progressive than the Water Club is The Chelsea, a 331-room boutique hotel that's the first non-gaming property to be built on the Boardwalk since the '60s. The designers gutted two aging hotels — a Howard Johnson’s and Holiday Inn — while maintaining the facades. The interiors were outfitted with a retro-chic décor that includes quirky touches such as Good & Plenty candies in the snack bar and white parrot-shaped lamps on every nightstand. The hotel also houses two signature Stephen Starr restaurants and a lounge area that launched in association with trendy Manhattan hotspot, the Beatrice Inn.

The Chelsea pays tribute to the resort town’s 1950s heyday and kitschy casino past in order to engage younger, more stylish visitors. “Atlantic City was a resort town for 100 years before it became a gaming town,” says Curtis Bashaw, co-managing partner of Cape Advisors, the company that developed the Chelsea. “In the last five years, the city has done a pretty good job of moving toward non-gaming. It made sense for us to build a non-gaming haven.”

The growth of gambling alternatives is part of the city’s push to appeal to a broader audience. And the city’s new shopping centers reflect the updated appeal. The boom began in 2004, when The Quarter at the Tropicana opened. The Old Havana-themed shopping and entertainment center features 30 stores and 21 restaurants, and immediately attracted more young adults to its eclectic nightlife scene.

Image: The Quarter at the Tropicana
Tropicana Atlantic City
As labor and health-regulation controversies struck the Tropicana hotel and casino in recent years, its new shopping, entertainment and nightlife complex have helped the aging hotel and casino find its second wind.

Shopping became even more upscale, though, when the cash registers started ringing in 2007 at the Pier Shops at Caesars. Designed by the same company that built the Forum Shops in Las Vegas, the $175 million Pier Shops features 90 stores, including Tiffany & Co., Burberry and Gucci. It houses two pubs and several well-reviewed restaurants, including Stephen Starr’s Zen-inspired (if far from Zen) Buddakan and the retro-chic Continental.

“These new developments will give Atlantic City a more well-rounded appeal,” Zamansky says. “There are more options, particularly luxurious ones.” She adds that the old casinos won’t be left behind. “It’s a big marketplace. They’ll find their own niche.”

Still, finding that niche required some major updates. That’s why Harrah’s invested $550 million in its new Waterfront Tower, opening up 964 rooms and building a 23,000-square-foot indoor pool as the casino’s new centerpiece. Caesars refurbished 680 luxury and premium guest rooms in the Century Tower and opened the Qua Baths and Spa (with a rooftop pool). The Trump Taj Mahal upgraded 800 of its rooms and added the new $250 million, 39-story Chairman Tower. The Tropicana also invested $225 million into a 502-room hotel tower and The Quarter.

One reason for the city’s face-lift is the growing number of out-of-state gambling sites. In recent years, the Pocono Downs Racetrack slot machines have poached gamblers from Philadelphia, while Connecticut’s Mohegan Sun has pulled visitors from nearby New York. There's also a proposed $600 million Catskills casino just 75 miles from Manhattan, and talks of a $550 million casino on the Delaware River waterfront, a short ride from Philadelphia.

“A lot of lot of those developments spurred Atlantic City to change,” says Zamansky. “When there are slots in your backyard, you need to offer more options.”

And though gambling revenues have fallen across the board in recent years, it’s possible that shopping and entertainment receipts may make up the difference. Particularly when there are options such as the Qua Baths and Spa’s $5,000 ten-hand massage.

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