Frank Formica says agency leadership has been working for months on a potential public-private solution to preserve the 502-room convention center hotel as its owners warn of a possible December closure.
ATLANTIC CITY, N.J. — A potential rescue plan is taking shape for the Sheraton Atlantic City Convention Center Hotel, where a threatened closure before the end of the year has raised concerns about the future of the resort's convention business.
Frank Formica, a member of the Casino Reinvestment Development Authority (CRDA) board, says agency leadership has been working for months on a plan that could bring together state agencies, private investors and local government to keep the hotel operating.
Formica discussed the situation Wednesday, Sept. 23, during an appearance on The Don Williams Show on News Talk 1400 and 92.3 WOND.
"We have a plan to bring partners together to rescue the property," Formica said.
The former Atlantic County freeholder emphasized that the CRDA has the legal authority to oversee redevelopment in Atlantic City and could play a central role in coordinating a solution.
However, he said the agency needs support from state government and other potential partners to move forward.
"We just need to get all the players on the same page to realize the urgency of this, and we can get it done," Formica said.
Hotel Owners Warn of Possible December Closure
The Sheraton's owners, Linney Investors LLC, have warned that the 502-room hotel could close in December if they are unable to secure financing for a proposed redevelopment project.
The owners previously received land-use approval for a plan that would convert approximately half of the hotel's rooms into senior housing while retaining the remaining rooms for hotel guests.
The project has encountered financing difficulties, with the owners seeking state tax incentives to help make the conversion financially viable.
Formica said the possibility of losing the hotel presents a serious challenge for Atlantic City's convention industry.
The Sheraton is directly connected to the Atlantic City Convention Center and serves as a headquarters hotel for conventions and trade shows.
According to Formica, many large conventions require an attached hotel with at least 500 rooms when considering potential host cities.
He argued that reducing the Sheraton's room count by half could make Atlantic City ineligible for certain events, even if the proposed senior housing conversion were completed.
"Most large conventions require when you go out to market for a convention, one of the things they say, do you have an adjacent hotel next to your convention center with at least 500 rooms?" Formica said.
He believes preserving the hotel's existing room capacity should be a priority in any redevelopment plan.
Formica: CRDA Did Not Endorse Cutting Hotel Rooms in Half
Formica also clarified the circumstances surrounding the CRDA's earlier approval of the proposed senior housing conversion.
Although the board approved the owners' land-use application, Formica said that vote should not be interpreted as an endorsement of the underlying redevelopment concept.
He said board members were advised by the agency's legal counsel that their authority in that proceeding was limited to determining whether the application complied with applicable land-use requirements.
"Almost every board member objected to cutting it in half," Formica said.
He explained that members were not permitted to vote on the financial viability of the proposal or whether reducing the hotel's room count would benefit Atlantic City's convention industry.
"So when the vote went through that we approved it, we did not approve that change," Formica said. "We only approved the fact that their attorneys made an application that complied with land use laws."
Formica said several board members feared that the proposed reduction in hotel rooms could create additional problems for the city's convention business.
He expressed frustration that the owners subsequently encountered financing difficulties and warned of a possible closure.
Public-Private Partnership Could Be Part of Solution
Formica said the CRDA's executive director and chairman have been working on a potential rescue plan for months.
He suggested that a public-private partnership could provide a way to preserve the property without requiring the CRDA to purchase or operate the hotel itself.
The arrangement could involve state agencies, private investors, Atlantic County and Atlantic City.
Formica pointed to previous economic development projects in which government agencies helped facilitate financing or bring together public and private partners.
He cited the development of Stockton University's Atlantic City campus, which involved financing assistance from Atlantic County, as an example of how government participation can help advance major projects.
Formica said a similar approach could be considered for the Sheraton.
He also raised the possibility that a change in the property's ownership or financial circumstances could create an opportunity for new investors.
"There is a plan that can come into place that can be overseen by the CRDA and the state of New Jersey, and maybe they partner with the county and certainly with the city to make sure that this hotel stays open at 500 rooms," he said.
Formica did not identify potential investors, disclose the amount of financing that might be required or provide a timetable for implementing the proposed rescue plan.
He also did not announce a formal agreement or a commitment of public funding.
His comments indicate that discussions about a potential solution are underway, but the hotel's future remains uncertain.
Convention Business Already Facing Challenges
The threatened closure comes as Atlantic City officials and tourism leaders raise concerns about the resort's ability to attract and retain major conventions.
Atlantic County Executive Dennis Levinson recently called on Gov. Mikie Sherrill to intervene, citing information from Visit Atlantic City indicating that the resort has lost more than $107 million in potential new convention business because of deficiencies in its convention facilities and headquarters hotel accommodations.
Formica said he has reviewed information identifying additional conventions that could be at risk if the Sheraton closes.
He specifically mentioned the Pool & Spa Show, one of the major trade shows held in Atlantic City.
The CRDA board member said the Convention Center and its attached hotel need improvements, including updated carpeting and better internet service.
He argued that those problems can be addressed through investment and maintenance, but losing the hotel entirely would create a much more difficult obstacle.
"That's a fixable problem, but to have it closed and shuttered is a kill shot to the convention business," Formica said.
He also praised the efforts of Visit Atlantic City President and CEO Gary Musich and his team to attract conventions despite the challenges facing the city's facilities.
According to Formica, uncertainty about the Sheraton's future could affect events being planned one or two years in advance.
Formica Calls for Urgent State Action
Formica emphasized that his comments reflect his position as an individual CRDA board member rather than a formal announcement of an approved agency plan.
He said the agency's leadership has been working to coordinate with state officials and other potential partners, but he believes the situation requires greater urgency.
The governor's office, the CRDA, Atlantic County and Atlantic City could all have roles in developing a solution, he said.
Formica stressed that the hotel is an essential component of Atlantic City's convention infrastructure and that allowing it to close could have consequences extending beyond the property itself.
"What I'm just calling for is a sense of urgency," he said.
He added that convention bookings, tourism-related employment and the broader local economy depend on preserving the city's ability to host major events.
For now, the Sheraton remains open, but the owners' warning of a possible December closure has created uncertainty about its future.
Formica said he hopes the parties involved can reach an agreement that preserves the hotel and its approximately 500 rooms.
"We can't, you know, you plan for conventions a year or two in advance," he said. "I'm just trying to bring to the light the urgency of this matter."
Frank Formica, a member of the Casino Reinvestment Development Authority board, discussed the Sheraton Atlantic City Convention Center Hotel during an appearance on The Don Williams Show on News Talk 1400 and 92.3 WOND on Wednesday, Sept. 23. The program airs Monday through Friday from 6 to 10 a.m.
About the Author
Scott Stephens
Scott has been an on-air personality, producer and newscaster for 30+ years. He has been a mainstay in the South Jersey Community and on the air across many different area stations. Scott can currently be heard on Kool 98.3 and News Talk 1400 & 92.3 WOND.
