Atlantic City's newest development is not a casino.

Opened in late June, the Playground is a smorgasbord of restaurants, retail and nongaming entertainment. There's an Apple store. A row of indoor live music venues, called "T Street," inspired by Memphis' Beale Street, stretches along the first floor. Once the final stages of development are complete, a private beach club will grace the sand, accompanied by two pools, including one on the roof.

The new project, designed by world renowned casino architect Paul Steelman, occupies the Pier Shops complex at Caesars, a 300,000-square foot space jutting out onto the beach from Atlantic City's boardwalk.

"I vowed I would never do it because I have a beach house [in the area] and I didn't want to mix business with pleasure," said Bart Blatstein, chief executive of Tower Investments, the Playground's Philadelphia-based developer. "But then, this was too good an offer to pass up."

The complex cost $200 million to develop in the mid-2000s. Blatstein said he scooped up the real estate for $2.7 million, eight months after a $45 million deal with a different buyer fell through.

In Atlantic City, vulture investors are beginning to swoop in. They're developers who specialize in turning around distressed properties or neighborhoods.

While many folks have written off the East Coast's one-time gambling mecca, investors such as Blatstein see an opportunity: Low real estate prices touting property tax bills that are fraction of their prerecession assessments, in a city desperately trying to reinvent itself.

Last year the struggling seaside resort lost four—a third—of its casinos, with two more operators (Trump Entertainment and Caesars Entertainment) going through bankruptcy. Atlantic County's unemployment rate, as of April, was 10.6 percent, higher than a year earlier. Gaming revenue has plummeted by half since 2006. Wall Street ratings firms have slashed the city's general obligation debt deep into junk territory, after the state appointed an emergency manager, who has since said A.C. faces a $101 million budget deficit this year.

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For those armed with capital and a penchant for risk, it has created a fire sale of sorts. "Fire sale, distressed sale. The lender just wanted to get rid of it," said Blatstein, from the hallway of T Street. "A.C. lost more jobs percentage-wise than any other part of the country last year. When things look that bad, that's when we come in."

The complex was 55 percent leased when Tower took over. Blatstein says he's already made his initial investment back, collecting back rent from those tenants and luring new ones to the updated space.

Further down the boardwalk at the northernmost end, several buildings sit eerily empty. Just past Resorts casino, where the boundary for the Trump Taj Mahal begins, it's as if an invisible barrier has been strung up along the wooden walkway.

The Taj is still embroiled in bankruptcy, after Trump Entertainment closed its sister casino, Trump Plaza, and filed for Chapter 11 bankruptcy last year. The Taj's largest creditor is billionaire investor Carl Icahn, who is acquiring the property as it emerges from bankruptcy. Icahn, who also owns the Tropicana Casino & Resort, is swapping the $292 million of the operator's debt that he owns, and will invest as much as an additional $100 million into the property.

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But not every fire sale a good investment makes. Past the Taj, "closed" signs still dangle from the shuttered Showboat casino, which Caesars sold to Stockton University for $18 million in December. Amid controversies of its own (the university's president resigned in April), Stockton is already looking to flip—a scenario complicated by a now-legally contested deed restriction imposed by Caesars that prevents the property from ever being used again as a casino.

A legal spat is brewing between the school and its intended buyer, Florida-based developer Glen Straub, as well. The two reportedly struck a deal in April for $26 million, a nearly 45 percent increase on the December purchase price. The future of that deal had been called into question based on recently filed court documents.

Then there's Revel, the $2.4 billion glass megalith that closed down last Labor Day weekend, following its second foray into bankruptcy in as many years. After a $110 million deal with Canadian private equity firm Brookfield Capital Partners fell through, Straub stepped in and closed that deal. His Polo North Country Club purchased the casino for a staggeringly small $82 million, or less than 4 percent of the mega-resort's construction costs.

Straub has previously said he plans to offer an indoor water park in the 6.3 million-square-foot tower, and some casino gambling. But the property won't be open this summer, largely due to an ongoing legal dispute with Revel's power provider, ACR Energy Partners, a utility created solely to keep the lights on at the property.

Still, for all of the hurdles facing investors in Atlantic City right now, some are already considering more projects. "If we can pick up something inexpensive, sure," said Blatstein. "I am hoping for turnover of a lot of ownership here."

—CNBC's Amanda Weindel contributed to this report.