Blackpool on the Rocks


By Heidi Dawley Gypsy Sarah Petulengro, palmist and clairvoyant, is arranging the blue velvet curtains inside her lair on the north pier of Blackpool, England, a seaside resort some 20 miles northwest of Manchester. Petulengro has been plying her trade in this location for 15 years, telling the fortunes of tourists and locals alike. As the sign outside her door says: "No question is too big or too small."

So, deep in her mystical shed, surrounded by crystal balls and other tools of the trade, I ask the question that brought me to town. "What does the future hold for Blackpool?" I inquire, while rummaging in my wallet for the required $4.50.

The query carries a great sense of urgency for locals. Visitors to this once-teeming Victorian resort have nearly halved since 1989, to 10 million. That's a serious drop in a town that derives nearly 85% of its income from tourism. Nearly one-third of the town's hotels and guesthouses have gone out of business since 1996. The crime rate is now triple the national average, and the male unemployment rate regularly nudges 9% in some city sections.

BACK ON THE MAP? Once a mecca for good, clean family fun, Blackpool has degenerated into a rather tawdry place for raunchy bachelor and bachelorette parties, called stag and hen parties in Britain. "Something needs to be done," says Peter Moore, the man charged with crafting a revival plan.

One man who thinks he knows the way forward is entrepreneur Trevor Hemmings, Britain's 55th richest person. If he gets his way, tired and tatty Blackpool will become England's answer to Las Vegas. Hemmings, majority owner of entertainment company Leisure Parcs, is behind a $225 million plan to create a glitzy seafront casino, hotel, and convention center in Blackpool. The 1,000-room Egyptian-themed hotel would have high-roller gambling, musical entertainment, and no-limit slot machines.

"This plan would save the town," says Marc Etches, managing director of Leisure Parcs. "It would set Blackpool back on the tourism map."

CHAIN REACTION. In the last three years, Leisure Parcs has spent $120 million buying up Blackpool's Winter Gardens convention center, its famous Tower and piers, and much of its Golden Mile shorefront property. Now that Hemmings' outfit is a well established force in Blackpool, it looks like its plans for a resort casino will get the thumbs-up from the local council -- provided the British government proceeds with proposed changes to the gaming laws in March, which would make such ventures legal.

A study commissioned by Leisure Parcs predicts that the casino hotel could generate 3,000 jobs and pump $120 million in additional income into the regional economy. Both the company and the city government believe the first casino will prompt other hotel chains to build as many as five more and create a glitzy seaside gambling strip.

If this happens, it could stimulate up to $3 billion in total investment and create 25,000 jobs. "We see this as a cornerstone to the regeneration of Blackpool," says Alan Cavil, Blackpool Town Council's head of economic development.

IDLE DONKEYS. Leisure Parcs' ambitious plans are modeled on Atlantic City, N.J., which, like Blackpool, was a faded shadow of its old glory when local government decided to roll the dice. Both seaside resorts had fallen prey to the same social trend. In the 1960s in the U.S., and the 1970s in Britain, an increasingly wealthy society began looking for vacation destinations further afield. In Britain, rather than the traditional two weeks at a local seaside resort, holidaymakers began jetting off to Spain, where they could count on reliable sunshine and cheap packaged holiday fares.

Blackpool's typically British weather and traditional entertainments -- ho-hum fun-fair rides, candy sticks called "rock" (Why the name? Try a bite), and donkey rides on the beach -- couldn't compete for the attention of more worldly vacationers. "With the great vision of hindsight, it has been a cataclysmic decline," explains Moore. "That's why Blackpool, with nearly every other British resort, has found itself in the position of having to recreate itself or die."

Certainly Norman Patchett, a 42-year-old who has earned his keep selling donkey rides on the beach for 20 years, has noticed a dramatic difference. "Times have changed," laments Patchett, who charges $1.50 a ride. "You just don't get the families anymore. And those that do come just don't sit on the sands." Until 10 years ago, his summer takings supported him all year. Now, he must work odd jobs in the winter.

PLAYING FOR KEEPS. The town council has recognized this plight and is busy trying to create a master plan for regeneration. Hemmings' proposal is a top contender. Other holiday towns that successfully regenerated themselves have done so around a key theme -- like golf or health spas. Gambling could be that driver for Blackpool, they believe.

And betting on Hemmings could be a winning wager. The reclusive, 66-year-old tycoon is worth about $780 million, according to The Sunday Times's latest annual Rich List, having made his money wheeling and dealing in a wide range of areas, including entertainment and gaming.

Hemmings began buying up Blackpool attractions after the government started the National Lottery, believing the introduction of state-sanctioned gaming would lead to a change in restrictive laws. It looks like he'll be proven right. In March, the government published a report outlining plans to liberalize the regulations. These changes would include a scrapping the current demand that aspiring gamblers join one of the existing casino clubs at least 24 hours prior placing their first bets, scrapping low prize limits on slot machines, and allowing alcohol on casino floors.

WALTZ TIME. Not all local residents agree that betting Blackpool's fortunes on blackjack and roulette is the best way forward, however. Steven Bates, spokesman for Blackpool Coalition Against Gambling Expansion, fears that unless the government gives Blackpool exclusivity, margins will be slim as these additional establishments pop up across Britain.

He also questions how much casinos have done for Atlantic City's nongambling businesses. His research shows that 1,000 of the 2,100 businesses in the town in 1976, when casinos were voted in, had shut their doors by 1996. "There will be no spin-off for local businesses in Blackpool," warns Bates.

Some local business people agree. "I don't think this plan would help me," says Blackpool native Carol Davies, owner of the 42-room Oak Lea Hotel. Davies, who bought her first hotel in the city back in 1976, says that the business has altered completely in the 25 years she has been an hotelier. It's a short-break destination now. And in the few days tourists typically spend in the city, Davies doubts if visitors to the resort hotel will leave the complex. Her son, Dale, says his generation is more optimistic about the plan. But both believe that it would drive the smallest hotels out of business.

"OH, NO, NO." Tourists -- few and far between on this sunny afternoon -- are mostly senior citizens. Opinions are mixed, but many fear that gambling would increase crime and further sully the town's image.

Soaking up the sunshine on one of North Pier's wrought-iron benches are Ruth Die and Helen McPhee, both 74, who have ventured down from Dundee in Scotland. They have been coming to Blackpool all their lives. These days, they come to dance in the Victorian setting of Blackpool's famed Tower ballroom, where a Wurlitzer organ fills the air with melodies everyday from 10 a.m. Neither thinks highly of the casino plan. Says Die: "Oh, no, no. I don't think that would be good. It wouldn't be good for the families."

Leisure Parcs' Etches counters all these arguments. He points out that Atlantic City, where the taxable base rose 2,000%, to $6.7 million, from 1978 to 2000, is now setting out to foster attractions outside of the casinos. Anyway, he adds, Leisure Parcs' plan contains the elements Atlantic City neglected, since Blackpool already has other amusements to draw folks out of the hotel.

GOOD VIBRATIONS. He believes that as one of Britain's best-known resorts, Blackpool is uniquely positioned to offer gambling, even if other towns get casinos, too. Finally, he hopes the central government will allow some of the gaming-tax revenues to remain in town, where he envisions it providing the seed money for a local renaissance.

A key to success will be sprucing up Blackpool. The view from the North Pier on this fine day certainly needs more than a lick of paint. Attractive architecture is scarce, and many buildings along the central strip are run down. Etches is pushing for the town and private sector to commit to getting key sections into better shape. That could mean new facades on shorefront properties and erecting glass roofs to banish the persistent wind and rain from major shopping thoroughfares.

Even if all this is done, though, would it be enough to draw more tourists to Blackpool? Etches believes it would, projecting as many as 25 million visitors to the town -- more than twice the current figure.

As for Gypsy Sarah Petulengro, she's picking up positive vibes. "I have good feelings about the next seven years for Blackpool. These good feelings have to do with change," she says, refusing my proffered money. "I do think that there will be casino resorts. Casinos will bring new people to Blackpool again." If this Romany Gypsy is right, Etches and Hemmings could hit the jackpot. Dawley is a contributing correspondent for BusinessWeek


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