The redevelopment of the Sheraton Atlantic City Convention Center Hotel is inching closer to reality after local officials and officials from Trenton officially endorsed the project. Members of the city council recently voted to approve two 30-year tax breaks for the redevelopment of the 16-story hotel at 2 Convention Boulevard into senior housing and a smaller hotel.
Officials voted to adopt the two separate ordinances granting tax breaks on June 16, less than three months after the Casino Reinvestment and Development Authority approved a final site plan for the entire project.
The text of one ordinance says Pennsylvania-based LINY Investor LLC, the owner of the hotel and a firm affiliated with Scannapieco Development, intends to renovate 252 existing hotel rooms and convert them into a limited-service hotel with 250 rooms.
Each room in the hotel will span approximately 368 square feet and be renovated with new finishes, artwork, carpets, wall coverings, and ceiling paint.
The second tax break adopted by the city council will support the conversion of 250 existing hotel rooms into 130 age-restricted residential units, inclusive of 26 affordable units. It will consist of studios, one-bedroom, and two-bedroom units. The one- and two-bedroom units will have full-size kitchens and be equipped with a refrigerator, freezer, oven, range, microwave, and dishwasher.
Both ordinances reference the CRDA application approved on March 17. That application states that LINY Investor will also expand the existing exterior amenities, renovate the building’s existing first and second levels, and construct a patio and a covered walkway from the convention center parking garage to the facility. The project also calls for modified signage.
Thomas Scannapieco, a principal of LINY Investor and the head of Scannapieco Development, said the residential portion of the building will also offer a golf simulator, a swimming pool, a barbecue and a sauna.
The hotel and residential portions of the building will use the same main entrance; however, a secondary entrance to the residential side will be added so each section of the building remains separate.
The existing Turn Tavern Brewer and Restaurant will continue to operate in the building.
While the Sheraton Atlantic City Convention Center Hotel was built in the 1990s and is located in one of the busiest parts of the city, the hotel has been struggling since before the pandemic. In January, Scannapieco told the CRDA during a public hearing on the project that the hotel has struggled to remain competitive, which has made it challenging to reinvest resources into the building.
He said Hurricane Sandy, the pandemic, mobile gaming, and competition from casinos have challenged the property’s economics. Although most hotels are renovated around every eight years, Scannapieco said the furniture, mechanical, electrical, and plumbing systems at the Sheraton have not been upgraded in 27 years.
“[Sheraton] formally notified us that this hotel does not meet brand standards,” he said during the hearing. “If we don’t undertake a major renovation, they will remove their name from the building. That would be a disaster for the hotel. It would be a disaster for the convention center, and it would be a disaster for Atlantic City at the entrance to the city.”
The principal added that LINY intends to install a new roof and redo the façade of the entire building, in addition to upgrading the mechanical systems.
Records from the Atlantic County Tax Board show the site was last sold in 1994. A report in NJ.com also said Scannapieco intends to secure a tax credit from New Jersey’s Aspire program to fund the renovations, which have an estimated price tag of $100 million.
