Purposes of the Authority

The Casino Reinvestment Development Authority shall provide capital investment funds for economic development projects that respond to the changing economic needs of Atlantic City and the State of New Jersey. It shall encourage business development and permanent job creation, promote opportunities for business expansion, and commit to facilitating a vibrant economic investment and employment environment for New Jersey.

The seeds of revitalization first took root in 1978, when the New Jersey Legislature and New Jersey voters welcomed the gaming industry to Atlantic City as a means of restoring the city’s economic vitality. Despite the elaborate hotels and casinos that soon illuminated the skyline and the influx of millions of hopefuls crowding gaming tables and coaxing slot machines, investment in the city in the late 1970s and early 1980s was virtually nonexistent.

Consequently, in 1984, the New Jersey Legislature established the CRDA as the venue through which capital investments would be made to directly facilitate the redevelopment of existing blighted areas and to address the pressing social and economic needs of the city and residents of the State.

The only agency of its kind nationwide – the CRDA has used casino reinvestments as a catalyst for meaningful, positive improvement in the lives of New Jersey residents statewide. In doing so, the CRDA has dramatically changed Atlantic City’s residential, commercial, cultural, and social landscape, while financially supporting quality-of-life improvement efforts throughout New Jersey.

CRDA Project Funding

In addition to other gaming-related taxes, State law gives each casino a choice: pay 2.5% of its gaming revenue to the State, or reinvest 1.25% of its gaming revenues through the CRDA in community and economic development projects in Atlantic City and around the State. Without exception, the casinos have chosen reinvestment.

Under the terms of the reinvestment agreement, each casino is required to pay to the CRDA 1.25% of its annual gaming revenues for 50 years, and the CRDA invests this money in eligible projects in Atlantic City, South Jersey or North Jersey, according to the following chart set by law. By law, the casinos are entitled to a return on their investments through the CRDA.

The law requires each casino to invest all of its first three years of required Atlantic City investments in housing and community development projects. In years 4 through 25, each casino is required to make half of its required Atlantic City investments in housing and community development projects. In years 26-35, each casino is required to invest all of its Atlantic City investment obligations in economic development projects.

The CRDA makes capital investments through bonds, loans and occasionally grants in projects that would not attract capital in normal market conditions. CRDA investment in a project cannot replace public or private capital that would otherwise be invested in the project.

The Authority provides financial assistance for the following types of projects:

The State Legislature has occasionally passed laws requiring the CRDA to establish funds for particular purposes. In some cases the law creates a new revenue source of funds.

Casino Capital Construction Fund and Atlantic City Expansion Fund
In response to future competition by the approval of slot machines in Pennsylvania and New York, in 2003-2004, the Legislature directed the CRDA to create the Casino Capital Construction Fund and the Atlantic City Expansion Fund for non-gaming casino capital expansion projects.

This legislation increased the casino parking fee from $1.50 to $3, and established a new $3 fee on casino hotel room stays in Atlantic City. A portion of the increased parking fee is used to repay CRDA bonds issued to create the $34 million Casino Capital Construction Fund, and a portion of the new casino hotel occupancy fee is used to repay CRDA bonds issued to create the $62 million Atlantic City Expansion Fund. Projects include:

Casino Hotel Expansion Fund
In order to address Atlantic City’s hotel room shortage, the Legislature required the CRDA in 1993 to make $100,000,000 available for casino hotel room expansion projects. In 1996 the law was amended to require the CRDA to make an additional $75,000,000 available for casino hotel room expansion projects.

The fund has leveraged more than $1 billion in hotel expansion projects resulting in the addition of approximately 3,500 new hotel rooms in Atlantic City.

Corridor Projects Fund
The Corridor Projects Fund was created as the result of a law passed in 1993 establishing a $1.50 casino parking fee and authorizing the CRDA to issue bonds to generate funds for transportation infrastructure and economic development projects in the “corridor region” of Atlantic City, which includes the area surrounding the main entrance into the city from the Expressway, as well as areas of heavy traffic and economic development along the multiple access routes into Atlantic City and the major thoroughfares within Atlantic City.

Revenue from the $1.50 fee is used to repay CRDA bonds issued to generate $170 million for the Corridor Project Fund. Projects include:

North Jersey/South Jersey Projects Fund
In 2004, the Legislature required the CRDA to issue bonds to create a $31 million North Jersey/South Jersey Projects Fund for North Jersey and South Jersey (not including Atlantic City) community and economic development projects. By law, a portion of the $3 casino hotel occupancy fee is used to repay the CRDA bonds. Projects include:

Boardwalk Revitalization Fund
A legislative change in 2004 enabled the CRDA to issue bonds to create the $100 million Boardwalk Revitalization Fund for façade improvements and other capital projects on the Boardwalk that are consistent with the CRDA’s architectural design guidelines for the Boardwalk.

The Boardwalk Revitalization Fund bonds are repaid from two sources – a portion of required Atlantic City investments for economic development and a voluntary contribution by the casinos of a portion of their parking fee revenue, beyond the parking fee that the law requires the casinos to pay for the Corridor Projects Fund and the Casino Capital Construction Fund. Projects include:

CRDA Urban Revitalization Program

The CRDA Urban Revitalization Program, established by law in 2001, is a tax-incentive program to encourage the construction of new entertainment and retail venues in Atlantic City. The purpose is to further entice visitors to the City, as well as create new jobs and tax revenue for the State and local government.

The law allows the CRDA to approve 11 entertainment-retail districts, each of which must consist of at least 150,000 square feet of entertainment, retail, dining, non-casino hotel or residential unit space (i.e., condominiums). The developer of an entertainment-retail district can be a casino licensee, a private developer or the CRDA itself.

The incentives for the developer to establish an entertainment-retail district are:

A sales tax rebate on construction materials to build the project.
An up-to $2.5 million annual rebate of sales taxes generated on retail sales in the entertainment-retail district.
An annual grant based upon incremental luxury tax generated in the entertainment-retail district.

In addition to the incentives for the developer, the CRDA receives, for each entertainment-retail district, an annual rebate of up to $2.5 million in sales tax generated in the district, but only after the developer’s $2.5 million rebate is paid.

For example, if a district generates $5 million in sales tax, the developer and the CRDA would each receive a $2.5 million rebate. If the district generates $4 million in sales tax, the developer would receive $2.5 million and the CRDA would receive $1.5 million.

Entertainment-retail districts as of Fall 2005:

"The Walk," approximately 320,000 square feet of retail, restaurant and entertainment space located between the Atlantic City Convention Center and the Boardwalk. A planned second phase would double the size of the district.
"The Quarter", approximately 194,000 square feet of retail, restaurants and entertainment in a festive old Havana theme, located in the Tropicana Hotel and Casino.
The Pier at Caesars, approximately 325,000 square feet of retail, restaurant and entertainment space on the site of the former Ocean One Mall on the Boardwalk.