The Sheraton Atlantic City Convention Center Hotel could shut its doors by December 15 unless New Jersey approves tax credits for a roughly $100 million renovation, according to the hotel's ownership. The property has already laid off 99 workers effective October 1 and announced another 91 job cuts, even as its owner pushes to convert 130 of the hotel's 502 rooms into age-restricted senior apartments to keep the building financially viable.
The renovation plan, which would transform 130 of the hotel's rooms into apartments and modernize the remaining 252 rooms as a limited-service hotel, hinges on tax credits from the New Jersey Aspire Program, according to NJ.com. Owner LINY Investor LLC said it has not been promised any state funding but expects credits to be awarded in time to prevent the closure, per the same report. The Atlantic City Council already cleared a local path forward in June 2026, approving two 30-year tax break ordinances that authorize the same unit breakdown — 130 age-restricted units, including 26 affordable ones — according to Jersey Digs.
The math behind the request is stark. Scannapieco Development Corporation president Tom Scannapieco has said the 29-year-old hotel has lost money every year since 2007, making private commercial loans impossible to secure for capital renovations without state tax credits, per a company statement shared on Reddit. NJ.com's reporting adds that the hotel previously cited a gradual decline in revenue as a driving reason for the overhaul.
A Funding Program Frozen at the Worst Time
Timing has worked against the hotel. The New Jersey Economic Development Authority temporarily paused new applications to the Aspire Program on July 23, 2026, citing high demand and transaction costs that were reducing the funds actually reaching underlying developments, according to RedevelopNJ. Atlantic City's status as a Government-Restricted Municipality allows eligible projects there to receive Aspire credits with an 85% cap and a $120 million maximum, per EisnerAmper's analysis of the rules.
NJ.com reports the Aspire Program provides subsidies for Atlantic City projects valued up to $120 million, overseen by the New Jersey Economic Development Authority. Whether the Sheraton's application will clear the backlog before the owner's stated deadline remains an open question, and the outlet notes the hotel owner has not been guaranteed any award.
Layoffs Mount as the Clock Ticks
State labor filings show the scale of the workforce reduction. Official New Jersey Department of Labor WARN notice listings confirm that operating entity Headquarters Hotel Mgmt, LLC filed a mass layoff notice affecting 91 employees effective December 25, 2026, following an earlier filing affecting 99 workers effective October 1, 2026. NJ.com reports that LINY Investor LLC has said the hotel's staff is its foremost concern, noting some employees have worked at the property for more than 20 years.
The Sheraton's cuts are part of a broader statewide pattern. New Jersey employers filed 84 mass-layoff notices covering 9,242 workers during the first seven months of 2026, a 42% increase in WARN filings compared to the same period in 2025, according to Community News.
What the Redevelopment Would Look Like
If funded, the renovation would reshape both halves of the property. The approved site plan includes a golf simulator and full-size kitchens for the senior apartments, an expanded outdoor patio, a new pedestrian canopy connecting to the convention center garage, and updated lobby dining venues, according to Jersey Digs' reporting on the project. NJ.com adds that the plans also call for a restaurant, cafe, and bar alongside the updated lobby.
Built in 1997 as a travel accommodation for convention attendees, the hotel is linked to the Atlantic City Convention Center by an enclosed skywalk above Michigan Avenue and once housed an office for the Miss America Organization, which has held a pageant at Jim Whalen Boardwalk Hall, per NJ.com's account. The Casino Reinvestment Development Authority approved a land-use request in March 2026 allowing the Sheraton and Scannapieco to launch the redevelopment, the outlet reports, and without the project moving forward, the hotel may lose its Sheraton affiliation altogether.
Convention Business Stakes and Wider Headwinds
Gary Musich, president of Visit Atlantic City, has said keeping the Sheraton fully operating as a hotel is vital to the city's convention business, according to NJ.com, since attendees need the convenience of a hotel as part of the convention center campus. A closure could make the convention center unsuitable for attracting large events, the outlet reports, with ripple effects on the city's broader tourism economy.
The contrast with gaming properties down the Boardwalk is notable. Borgata Hotel Casino & Spa announced plans in September 2026 to put $107 million into renovating its resort tower rooms, with construction scheduled to begin September 13, according to Hoodline's prior reporting, underscoring how much easier capital reinvestment is for casino operators than for a non-gaming convention hotel. The 2026 U.S. Open Pool Championship is scheduled for Frisco.
LINY Investor LLC is the Pennsylvania-based affiliate tied to Scannapieco Development Corporation, a firm that has completed over $1 billion in real estate projects and specializes in ultra-luxury developments such as 1706 Rittenhouse Square and 500 Walnut. Whether that track record, combined with local approvals already in hand, will be enough to unfreeze state tax credits before the hotel's targeted December 15 closure remains unresolved.
