ATLANTIC CITY — The Sheraton Atlantic City Convention Center Hotel could close by Dec. 15 if its owner does not secure state financial assistance, adding new urgency to a controversial plan to transform roughly half of the aging hotel into senior housing.
LINY Investor LLC, which owns the 502-room hotel next to the Atlantic City Convention Center, has issued prospective layoff notices to employees while seeking state assistance for the redevelopment. The owner said Monday the property could close Dec. 15 if the assistance does not come through.
Atlantic City Mayor Marty Small Sr. addressed the situation Tuesday morning on The Don Williams Show on News Talk 1400 & 92.3 WOND, saying he recently spoke with developer Thomas Scannapieco and defending the plan as a practical response to an underperforming property.
“Employees got notices that there will be layoffs,” Small said. “But we supported converting the Sheraton into 250 senior apartments, which at the end of the day, if we're all being honest, it's easy to play Monday morning quarterback and look on the outside.”
Small's reference to 250 senior apartments appears to have been shorthand for the conversion. The approved redevelopment plan actually calls for converting 250 existing hotel rooms into 130 age-restricted residential units, including 26 affordable units. Another 252 existing hotel rooms would be renovated to create a 250-room hotel.
Small: Sheraton rarely sells out
Small made a striking assertion about the hotel's recent performance, saying it may have sold out only a handful of times during the year.
“The Sheraton might only have been sold out twice during the whole year,” Small said.
He suggested those occasions likely coincided with major convention business and argued that the property has suffered from a lack of investment.
“No money has been dumped into the Sheraton,” Small said. “It still looked like it looked when it was open.”
South Jersey NewsBeat could not independently verify Small's assertion about the number of sellouts.
But Scannapieco has publicly described the hotel as financially troubled and in need of a major overhaul. During the redevelopment approval process, he said the property still had furniture dating to its opening and warned that without a substantial renovation, it risked losing the Sheraton brand.
The hotel opened in 1997.
Convention business raises another concern
The redevelopment presents Atlantic City with a tradeoff beyond the hotel itself.
Small acknowledged that tourism officials have concerns about reducing the Sheraton from more than 500 rooms to about 250 because some convention business requires a host hotel with at least 500 rooms.
“I understand that our tourism folks may not be as happy because they're saying it disqualifies us to receive certain conventions based on a 500-plus room host hotel,” Small said.
Small questioned how significant that problem should be, pointing to the city's large casino hotels, including Caesars, within a short distance of the Convention Center.
But the Sheraton occupies a distinctive position in Atlantic City's convention business.
Visit Atlantic City's meeting inventory lists the Sheraton with 502 rooms, 425 rooms available for convention commitments and 27,000 square feet of meeting space. Most significantly, it is listed as connected to the Atlantic City Convention Center.
The Convention Center itself describes a pedestrian bridge linking it directly to the Sheraton as one of the features making the facility accessible to convention visitors.
Marriott currently advertises the Sheraton as having 15 event rooms, 12 breakout rooms and capacity for events of up to 1,200 people.
That means the issue isn't simply whether Atlantic City has other hotels with more than 500 rooms. The Sheraton provides hundreds of rooms immediately adjacent and connected to the Convention Center.
Layoffs already looming
Employment concerns surrounding the property predate this week's potential closure warning.
A New Jersey WARN notice previously indicated that 96 jobs were expected to be eliminated Oct. 1 as the property prepared for the partial conversion.
The latest prospective notices raise the possibility of a much broader impact if the entire hotel closes in December.
The exact number of employees who could be affected by a full closure was not immediately clear.
$100 million redevelopment
The roughly $100 million redevelopment calls for far more than simply converting hotel rooms into apartments.
According to project documents, the remaining hotel rooms would be renovated, exterior amenities expanded and portions of the first and second floors remodeled. Plans also include improvements supporting both the residential and hotel portions of the property. The existing Tun Tavern Brewery and Restaurant would remain.
Atlantic City approved two 30-year tax agreements for the redevelopment earlier this year after the Casino Reinvestment Development Authority approved the project's site plan.
The residential portion is planned as a 55-and-older community, with studios and one- and two-bedroom apartments and amenities including a pool, golf simulator, barbecue area and sauna.
For Small, the choice is between supporting redevelopment of a struggling property or risking further deterioration of a prominent hotel at the entrance to Atlantic City's convention district.
“This is a renaissance period for the great city of Atlantic City,” Small said. “And we need to be as supportive as we can.”
The question now is whether the state will provide the financial assistance the owner says is necessary — and what happens to the Sheraton, its employees and Atlantic City's convention business if it doesn't.
Mayor Marty Small Sr. appeared Tuesday on The Don Williams Show on News Talk 1400 & 92.3 WOND. The Don Williams Show 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.
