Atlantic City has a long history of water park proposals that never get built. That’s not stopping Philly developer, Bart Blatstein.
A bit premature? Blatstein recently held a groundbreaking ceremony for the $100 million project adjacent to his Showboat Casino on the Atlantic City Boardwalk.
Financing is still an issue.
97% of this Atlantic City waterpark project being financed by government?
Blatstein will get a 20-year state tax incentive. Business Insider: The CRDA, Casino Reinvestment Development Authority has approved a $2.5 million tax break for 20 years. There will also be tax breaks on construction materials as well.
The Atlantic County Improvement Authority (ACIA) agreed to borrow $97 million for this $100 million project.
The Improvement Authority serves as Atlantic County’s financing, development and project management agency.
Atlantic County Improvement Authority
Executive Director John Lamey, Jr.
Atlantic County Commissioners voted to approve the loan. Both agencies claimed there was no risk to Atlantic County taxpayers.
Another sign of trouble happened last summer when the Atlantic County Improvement Authority abruptly switched underwriters to sell the waterpark bonds.
If Blatstein’s waterpark succeeds, it would pay back investors with tax-free interest. If the waterpark project fails, investors would lose some or all of their money.
Investors were specifically warned in writing that their investment was NOT guaranteed by taxpayers. However, this is not necessarily true, says Seth Grossman of Liberty and Prosperity.
Will Blatstein’s waterpark earn enough money to pay back $97 million in revenue bonds plus interest?
Seth Grossman
Last March, the Authority hired Wall Street investment bank Janney Montgomery Scott to sell revenue bonds. A few months later, Bloomberg.com reported that Janney was unable to find investors to buy those bonds.
Wall Street investors describe these Atlantic City Waterpark bonds as ‘junk’.
Bloomberg reports that Blatstein Water Park bonds failed to sell ‘despite surging investor demand for high yield debt’ elsewhere.
Last summer, Bloomberg reported that the ACIA planned to have Citigroup Inc. take over the deal.
According Bloomberg.com, these revenue bonds were unrated but paid a high rate of interest.
According to Bloomberg, “It is rare for borrowers in the municipal-bond market to change underwriters just as a deal is set to price”. Bart Blatstein said Janney would still be part of the transaction.
Blatstein’s lawyer, Jeffrey Winitsky said a new underwriter would “give the transaction a fresh perspective and marketing effort”.
Seth Grossman of Liberty and Prosperity: It seems unusual that the Authority is not doing any investigation or holding any public hearings on why Wall Street investors didn’t want to lend money to this waterpark project.
Admission would range from $99.99 for adults to $69.99 for children
If they think the project is too risky for them, should we ask if it is too risky for Atlantic County taxpayers?
Proposals to build a waterpark at Steve Wynn’s original Golden Nugget on the Boardwalk failed because they could not find enough lenders or investors in 2015, and again in 2017. What makes this water park project better?
$100 admission for adults & $70 admission for kids? That’s a $340 admission price for a family of four! Really? Doesn’t look like Disneyworld to me. If it turns out like most of Bart’s other AC investments, I won’t be buying any of those bonds.
I couldn’t think of a worse investment during this pandemic. Spend $340 for a family of four to have fun in a bacteria/virus infested environment? Blatstein is supposed to be an investment genius? Look at what happened to the Playground Pier. Another Blatstein disaster.
What has happened to common sense in Atlantic City government?
I think the government financing, and crazy proposed prices are both absurd. But I think you’re comparing apples and oranges with Blatatein’s purchase of the Pier at Caesars for under $3M of his own money versus this venture It was a dismal failure for many reasons including that site has never really worked as retail space, the economy, Covid etc. But at least that wasn’t government financed and huge tax abatements for a long term.
I think the AC government involved in this directly makes no sense, but there are other water park/hotel ventures like Gray Wolf and Kalihari sites that are extremely successful, safe/clean family ventures. Timing seems odd, the bond issue versus other city needs also raises questions but I others have made this work in places like the Poconos and other cities across nation.
Mayor Small should be cleaning up City and making it safe for Business and Families to come in.
Margate Lover’s description conjured images of Caligula’s father frolicking in the pool with his concubines and their venereal deceased ridden bodies.
Blatstein said he was rushed by AC Mayor Small to get project off ground. Trying to show they were doing big things.