Plunging casino revenues put a massive hole in the city's budget, which is now being slashed as a result. That has meant job cuts, mostly through attrition, and pay freezes. The city is $260 million in debt and owes millions more in bonds. Its credit ratings have tanked and more than 6,000 casino workers lost their jobs last year alone.
The New Jersey city once known as "America's playground," is not in good health. It's on life support — but it is not dead, according to loyalists including radio host PinkyKravitz.
"If you listen to the newspapers around the country Atlantic City is dead," said Kravitz in an interview just before his daily call-in show that he broadcasts from The Borgata casino and hotel. But the city "ain't dead," he insists.
"It's a horror. We've been fighting it and fighting it," he said of the impression left by media coverage.
Kravitz is 87 and has been a broadcaster for 58 years. He's witnessed Atlantic City go through its ups and downs and he describes its current state as "a sad situation."
Atlantic City fell ill for two main reasons: competition and no Plan B. It used to have a monopoly on gambling on the East Coast. It was the one and only destination, and as the casinos raked in the cash, so did the city.
Casino revenues hit a peak of $5.2 billion in 2006. As long as they were up, property taxes buoyed the city's budget. But then casinos started opening in Delaware, Pennsylvania and Maryland, and people didn't have to travel to New Jersey. Then the recession hit and even more people stayed home.
Revenues dropped — last year they were around $2.5 billion — which meant the city was getting far less money and it wasn't bringing in enough cash from other sources to make up the shortfall.
Lots of bad news in 2014
Four out of 12 casinos went out of business in 2014. The huge 47-storey Revel, which cost more than $2 billion to build, shut down after only two years in operation. The Showboat, Trump Plaza and Atlantic Club are the others that now have "Closed" signs in their windows and whose former workers filed for unemployment benefits.
A fifth, the Trump Taj Mahal, was slated to close in December but is alive for now, while lawyers argue in bankruptcy court and workers fight to get back health insurance that was cut off, along with pension contributions.
"There was a lot of bad news last year," Matt Levinson, head of the Casino Control Commission, acknowledged in an interview in his office, which features a wide-open view of the famous boardwalk. His organization oversees casinos and works with other stakeholders on the city's revitalization.
But like Kravitz, Levinson is hopeful. He believes the city is headed in the "right direction" and is stabilizing its economy by not keeping all its eggs in the casino basket. "We're doing everything we can to make Atlantic City a success story," he said.
The city is trying to attract more business to its convention centre, for example and more events — the city is once again hosting the Miss America pageant. Retail, entertainment and dining attractions for visitors are being added in the casinos and elsewhere.
A new Bass Pro Shops, a big outdoor and wilderness chain, is under construction across the street from the closed Trump Plaza. Showboat was bought by a college, which will open a new campus there in the fall. Harrah's casino hotel is adding a conference centre and the Tropicana is also expanding. All these developments will mean jobs.
If Revel reopens, at least 2,000 people will be hired. There is a buyer, but legal wrangling over the deal continues.
Mayor Don Guardian said in an interview after taking calls on Kravitz's show, as he does every month, that for too long all Atlantic City had was gaming.
Transition feels like a 'root canal'
"We didn't pay attention to anything else. And shame on us for doing that," he said. "But it's time to move ahead, it's time to expand the market well beyond gaming," said Guardian, who took office in January 2014.
"We've got to be the coolest city in the state of New Jersey for our future development."
Guardian said there are a lot of reasons to love Atlantic City, and Canadians should put it on their radar when making vacation plans. The city is in talks with Air Canada and hoping it will soon offer direct flights from Toronto.
The mayor said he feels a burden on his shoulders and he knows this transition is painful as the city makes cuts, jobs are lost and taxes go up. But what he likens to a "root canal" will be worth it in two years, he predicts.
Sitting in "Pinky's Corner," as his alcove in the Borgata is called, Kravitz said the city's efforts are starting to pay off. "For those of us who have been here a while, we're starting to see a turnaround," he said.
Land is cheap and developers are interested in it, the beach and boardwalk have never been safer or cleaner, and the remaining casinos are doing well, the long-time resident said.
On a Monday afternoon, in the middle of February, the front desk at the Borgata was indeed busy with guests checking in and there were plenty of people pulling slots and trying their luck at other games.
"There are people who are seeing that Atlantic City still has its charm," said Kravitz.
Outside the casinos, on a grey, windy weekday, it was hard to find Atlantic City's charm. But it's easy to imagine how it would be fun to visit in the summer when the beach and boardwalk are packed.
Hope that Atlantic City will survive
The iconic boardwalk, built in 1870, is in some ways symbolic of what's happening in Atlantic City. Take a walk along it and you'll see kitschy shops selling souvenirs, beach attire, ice cream, salt water taffy and other non-diet food, interspersed with the hotels and casinos that tower over the promenade.
You'll see vacant retail spaces and storefronts in need of updating, blank billboards and the shuttered doors of the failed casinos. But you'll also see signs of the city trying to modernize.
Flat-screen TVs hang on posts along the way telling passerby about activities in the city, there are cell phone charging stations and the pier outside Caesar's hotel boasts high-end retail stores including Apple, Burberry and Gucci.
These contrasts are part of the city's charm, Levinson suggested.
"You can do everything from a 99-cent store to the Apple Store on the boardwalk. It's a great combination, it's what makes Atlantic City Atlantic City," Levinson said.
He thinks the strong civic leadership, including the mayor and an emergency manager recently appointed by Governor Chris Christie, will succeed in getting Atlantic City off life support.
"I'm very optimistic," said Levinson. "Atlantic City is going to survive."