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Atlantic City Bets on Resurgence With Stockton University's New $178.3 Million Local Campus

City Predicts More Diversified Development
September 24, 2018
Earlier this month Stockton University started conducting classes at its new $178.3 million campus on the ocean in Atlantic City, New Jersey. The complex includes a 145-unit beachfront student dormitory, a high-rise parking garage to its right, and an academic center across the street. The residential complex is on the boardwalk. Photo courtesy of Stockton University.

Atlantic City, the New Jersey seaside community long down on its luck, is in the midst of a resurgence. And the addition of Stockton University’s $178.3 million campus on the gambling mecca’s fabled boardwalk has business and government officials saying the development increases the odds of further economic recovery.

"This is the first non-casino development project in this city in years ... and it is the first of many," said New Jersey Assembly Majority Leader Louis Greenwald, a Democrat representing the 6th legislative district.

Stockton University Atlantic City, which opened for classes this month, includes a roughly 56,000-square-foot Academic Center at 3711 Atlantic Ave.; a 145-unit, nearly 220,000-square-foot student residential complex that faces the beach at 3701 Boardwalk; and a seven-story, 875-space parking garage at 3800 Atlantic Ave. Stockton is also purchasing a former casino in the city, a site for even more expansion by the school.

Turning Atlantic City into a university town is part of an effort to revitalize and diversify the city’s troubled economy, said Jon Hanson, a prominent North Jersey real estate developer and chairman of Atlantic City Development Corp., known as AC DevCo, a non-profit redevelopment company.

"Atlantic City had one industry, the casino industry," said Hanson, the founder and chairman of Hampshire Cos. in Morristown, New Jersey. "This is the first start in having non-casino areas."

The new Stockton campus was built through a public/private partnership with AC Devco, an effort funded by the New Jersey Economic Development Authority, which provided $65 million in tax incentives; the Atlantic County Improvement Authority, which bonded $127 million toward the project; the state’s Higher Education Capital Improvement Fund Act; Stockton University and South Jersey Industries, a natural gas company planning to move to the site.

The goal for the resort city on the ocean is to bring "eds and meds," university and health-care facilities, as expansions to the local economy, according to State Senate President Steve Sweeney. He spoke, along with Hanson and Greenwald, at a dedication ceremony for the new campus on Sept. 20.

While the talk is upbeat, Atlantic City is still not out of the woods in terms of its financial woes and its need to create a new non-gambling-centric economy, according to a new report by the state.

That report, commissioned by New Jersey Governor Phil Murphy, recommends that the city remain under state, not local, control. The state took on oversight of Atlantic City in 2016, when a number of casinos closed their doors and the city was deep in debt.

"This city was literally two years ago days away from bankruptcy ... but we fought for the Atlantic City economic opportunity and recovery," Greenwald said.

Photo courtesy of Stockton University.Stockton University’s new Academic Center on Atlantic Avenue was built on the former site of Atlantic City High School. A hotel, condos, homes and apartments were also once located on the parcel where the college has constructed its new campus in the resort city. This photo depicts the site in the 1970s.

One of the recommendations of the state's report was economic diversification.

"We can do tremendous things in Atlantic City, but only if we do them working together and only if we focus on broadening the economy," Lt. Gov. Sheila Oliver said in a statement on the report.

In addition to bringing students to reside in and revitalize the Chelsea section of Atlantic City, the project will be giving the city additional benefits.

They include South Jersey Industries mid-November relocation of its headquarters and 220 white-collar employees from its current base in Folsom, New Jersey, to offices being constructed at the university's new garage, said Michael Renna, the company's president and chief executive. South Jersey Industries left Atlantic City several years ago.

The entire cost of the AC Gateway Project, which includes the utility's new headquarters and Stockton's campus, is $220 million, according to the university.

In addition, this fall AtlantiCare will open its first urgent care center -- and relocate its physician primary and occupational health offices -- to a ground floor commercial site at the parking garage.

The Stockton Atlantic City campus project was years in the making, and gives the university much-needed space to expand. The school’s main campus is not far from Atlantic City in Galloway, New Jersey, in the Pine Barrens region. But under environmental regulations Stockton can’t grow beyond its current borders.

Stockton President Harvey Kesselman and local officials point out that the college has plans in Atlantic City beyond the newly opened campus after acquiring another site on the boardwalk. In August the university said it is buying the Atlantic Club Casino Hotel, which has been closed since January 2014.

That former casino, just blocks from Stockton's new campus, includes roughly nine acres of upland lots, a beach lot with about 11 acres, a nine-level parking garage and a 23-story hotel tower. The seller, TJM Properties, a real estate and hospitality firm based in Clearwater, Florida, will demolish the hotel tower as part of the sale.

Atlantic City is attempting a comeback after a rough few years. The Atlantic Club that Stockton is purchasing was one of five casinos to shut its doors in Atlantic City, but now all but one, Trump Plaza, have been revived or found new uses.

The dormitory complex on the Stockton campus is near the breezy boardwalk, where cries of seagulls provide background noise.

With its expansion into Atlantic City Stockton is coming back to its roots: It opened a temporary location at the old Mayflower Hotel in the city in 1971 when its Galloway campus was under construction.

Linda Moss, Northern New Jersey Market Reporter  CoStar Group   

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