UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q


(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the quarterly period ended                      March 31, 1997
                                       -----------------------------------------

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the transition period from _________________ to _________________

                         Commission file number 33-27399




                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)





         New Jersey                                        22-2469174
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)                           


         Indiana Avenue & the Boardwalk, Atlantic City, New Jersey 08401
               (Address of principal executive offices) (Zip Code)

                                 (609) 340-3400
              (Registrant's telephone number, including area code)






     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Sections 13 or 15 (d) of the Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X    No ____




<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                                      INDEX


PART I               FINANCIAL INFORMATION                              Page No.

     Item 1. Financial Statements

             Introductory Note to Financial Statements                     2

             Balance Sheets as of December 31, 1996 and  March 31, 1997    3

             Statements  of  Operations  For the Three Months Ended 
             March 31, 1996 and 1997                                       4

             Statements  of Partners'  Capital  Accounts  
             (Deficit) For the Year Ended December 31, 1996 
             and the Three Months Ended March 31, 1997                     5

             Statements  of Cash Flows For the Three  Months  
             Ended March 31, 1996 and 1997                                 6

             Notes to Financial Statements                               7 - 9

     Item 2. Management's  Discussion  and Analysis of Financial 
             Condition and Results of Operations                         10-12



PART II                       OTHER INFORMATION

     Items 1-5 No  information  is  provided as the answers to 
               Items 1 through 5 are inapplicable.

     Item 6.   Exhibits and reports on Form 8-K                            12


<PAGE>


                                     PART I

Item 1.   Financial Statements

Introductory Note to Financial Statements

The  accompanying  financial  statements  have been  prepared by  Atlantic  City
Boardwalk Associates,  L.P. ("Partnership") without audit, pursuant to the rules
and  regulations of the Securities  and Exchange  Commission.  In the opinion of
management,  these financial  statements  contain all  adjustments  necessary to
present fairly the financial position of the Partnership as of December 31, 1996
and March 31, 1997,  and the results of operations  and cash flows for the three
months ended March 31, 1996 and 1997.

Although management  believes that the disclosures  included herein are adequate
to make the information contained herein not misleading, certain information and
footnote  disclosure  normally  included  in  financial  statements  prepared in
accordance with generally accepted accounting  principles are omitted herein and
are  incorporated by reference to the  Partnership's  Annual Report on Form 10-K
for the year ended  December  31, 1996 filed with the  Securities  and  Exchange
Commission.



<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
                                 Balance Sheets
                      December 31, 1996 and March 31, 1997

                                                                 (Unaudited)
                  Assets                         1996                1997
                  ------                     ----------           ---------

Current assets:
     Cash and cash equivalents             $  1,446,000             132,000
     Rent due from New Claridge                 408,000             650,000
     Interest receivable from partners           35,000              43,000
     Prepaid expenses                           264,000             164,000
      Other assets                              172,000             108,000
                                             ----------          ----------

         Total current assets                 2,325,000           1,097,000
                                             ----------          ----------

Hotel Assets                                183,529,000         183,538,000
Less:  Accumulated depreciation 
and amortization                            100,281,000         101,664,000
                                            -----------         -----------

              Net Hotel Assets               83,248,000          81,874,000
                                            -----------         -----------

Note receivable from New Claridge, 
   including accrued interest  of
   $3,258,000 and $3,366,000 in 1996 
   and 1997, respectively                     6,858,000           6,966,000
Deferred rent from New Claridge              37,807,000          38,683,000
Intangibles, net of accumulated 
  amortization of $3,626,000 and 
  $3,651,000 in 1996 and 1997, 
  respectively                                  179,000             154,000
                                            -----------         -----------

                                        $   130,417,000         128,774,000
                                            ===========         ===========

                  Liabilities and Partners' Capital Accounts

Current liabilities:
     Accounts payable                   $     1,035,000           1,126,000
     Accrued interest due New Claridge        1,147,000           1,099,000
     Current portion of long-term debt 
         due principally to New Claridge     17,227,000          17,504,000
                                            -----------         -----------

              Total current liabilities      19,409,000          19,729,000
                                            -----------         -----------

Long-term debt due principally to 
  New Claridge, including                    
    accrued interest of $20,000,000         
    in 1996 and 1997                        92,120,000           88,148,000
                                            ----------           ----------
Partners' capital accounts (deficit):
     New general partners                      105,000              125,000
     Former general partners                   173,000              185,000
     Special limited partners                 (187,000)            (167,000)
     Investor limited partners              18,797,000           20,754,000
                                            ----------           ----------

         Total partners'capital 
           accounts (deficit)               18,888,000           20,897,000
                                           
Commitments and contingencies              -----------           ----------
                                         $ 130,417,000          128,774,000
                                           ===========          ===========

See accompanying notes to financial statements.


<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                            Statements of Operations
                                   (Unaudited)

               For the Three Months Ended March 31, 1996 and 1997


                                                       1996            1997
                                                    ----------       --------
Revenues:
     Rent from New Claridge for the lease 
        of Hotel Assets                         $   9,848,000         10,031,000
     Interest from New Claridge                       108,000            108,000
     Interest from Special Limited Partners             9,000              9,000
     Investment                                        27,000             12,000
     Other                                              -                  2,000
                                                 ------------       ------------

                                                    9,992,000         10,162,000
                                                 ------------       ------------


Expenses:
     Cost of maintaining and repairing
         Hotel Assets paid to New Claridge          3,083,000          2,796,000
     Interest, principally on mortgages 
         to New Claridge                            4,108,000          3,746,000
     General and administrative                       167,000            170,000
     General Partners' management fee                  33,000             33,000
     Depreciation and amortization                  1,698,000          1,408,000
                                                    ---------        -----------

                                                    9,089,000          8,153,000
                                                    ---------        -----------


Net income                                      $     903,000          2,009,000
                                                   ==========        ===========

Net income per limited partnership unit
(450 units outstanding at the end of 
     each period)                               $      1,976               4,393
                                                ============      ==============


See accompanying notes to financial statements.




<PAGE>

<TABLE>
<CAPTION>

                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

               Statements of Partners' Capital Accounts (Deficit)

                      For the Year Ended December 31, 1996
                    and the Three Months Ended March 31, 1997


                                                         Class A       Class B        Class A          Class B         Total
                            New           Former         Special       Special        Investor         Investor        Partners'
                            General       General        Limited       Limited        Limited          Limited         Capital
                            Partners      Partners       Partners      Partners       Partners         Partners        Accounts
                            --------      --------       --------      --------       --------         --------        --------


<S>                       <C>              <C>            <C>          <C>             <C>              <C>             <C>
Partners' Capital
Accounts (Deficit),
December 31, 1995         $   57,000       144,000        (15,000)     (219,000)       3,457,000        10,711,000      14,135,000

Net income                    48,000        29,000          3,000        44,000        1,136,000         3,493,000       4,753,000
                            --------      --------      ---------      --------        ---------       -----------      ----------

Partners' Capital
Accounts (Deficit),
December 31, 1996            105,000       173,000        (12,000)     (175,000)       4,593,000        14,204,000      18,888,000

Net income
(unaudited)                   20,000        12,000          1,000        19,000          480,000         1,477,000       2,009,000
                            --------      --------      ---------      --------       ----------       -----------     -----------

Partners' Capital
Accounts (Deficit),
March 31, 1997
(unaudited)               $  125,000       185,000        (11,000)     (156,000)       5,073,000        15,681,000      20,897,000
                             =======       =======         ======       =======        =========        ==========      ==========

</TABLE>

See accompanying notes to financial statements.



<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.

                            Statements of Cash Flows
                                   (Unaudited)

               For the Three Months Ended March 31, 1996 and 1997


                                                       1996                1997
                                                      -----------       --------
Cash flows from operating activities:
     Net income                                   $    903,000        2,009,000
         Adjustments to reconcile net income to
         net cash provided by operating activities:
              Depreciation and amortization          1,698,000        1,408,000
              Accretion of discount on mortgage note   361,000          415,000
              Decrease (increase) in deferred rent     575,000         (876,000)
              Deferred interest on receivable 
                from New Claridge                     (108,000)        (108,000)
              Change in current assets and liabilities:
                  Decrease (increase) in rent due 
                      from New Claridge, interest 
                      receivable from partners, 
                      prepaid expenses and other 
                      assets                           198,000          (86,000)
                  Increase in accounts payable and
                      accrued interest due New Claridge 95,000           43,000
                                                       -------          --------

                      Net cash provided by 
                         operating activities        3,722,000         2,805,000
                                                     ---------         ---------

Cash flows from investing activities:
     Purchase of Hotel Assets                         (556,000)          (9,000)
                                                     ----------       ----------

                      Net cash used in investing 
                         activities                   (556,000)          (9,000)
                                                     ----------       ----------

Cash flows from financing activities:
     Proceeds of borrowings from New Claridge          570,000            61,000
     Principal payments of debt, principally 
       to New Claridge                              (3,516,000)      (4,171,000)
                                                     ---------           -------

                      Net cash used in financing 
                         activities                 (2,946,000)      (4,110,000)
                                                     ---------        ---------

Net increase (decrease) in cash and cash equivalents   220,000       (1,314,000)
Cash and cash equivalents, beginning of period       1,535,000        1,446,000
                                                     ---------        ---------

Cash and cash equivalents, end of period          $  1,755,000          132,000
                                                     =========       ==========

Supplemental cash flow information:
     Interest paid, principally to New Claridge   $  3,942,000        3,604,000
                                                     =========        =========

See accompanying notes to financial statements.


<PAGE>


                    ATLANTIC CITY BOARDWALK ASSOCIATES, L.P.
                          Notes to Financial Statements
                                   (Unaudited)


(1)      The Partnership

         Atlantic City Boardwalk Associates,  L.P. ("Partnership") was formed on
         October  31,  1983 to  acquire  the  buildings,  parking  facility  and
         non-gaming  depreciable,   tangible  property   (collectively,   "Hotel
         Assets")  of The  Claridge  Hotel and  Casino  ("Claridge")  located in
         Atlantic City, New Jersey; to hold a leasehold  interest in the land on
         which the  Claridge is located  ("Land"),  which Land was  subsequently
         acquired  by the  Partnership  as  part  of a  financial  restructuring
         ("Restructuring  Agreement");  and to engage in  activities  related or
         incidental thereto. The Partnership leases the Land and Hotel Assets to
         The  Claridge  at  Park  Place,   Incorporated   ("New  Claridge"),   a
         wholly-owned  subsidiary of The Claridge  Hotel and Casino  Corporation
         ("Corporation"), under operating leases.

(2)      Financial Condition of the Partnership and New Claridge

         The ability of the  Partnership to fulfill its obligations is dependent
         upon the  ability  of New  Claridge  to pay rental  payments  when due.
         Accordingly,  the financial  stability of the  Partnership is dependent
         upon the financial condition of New Claridge.

         As discussed in the Claridge's  Annual Report on Form 10-K for the year
         ended December 31, 1996, the Corporation  experienced  recurring losses
         and  serious  deterioration  in  its  cash  flow  in  1996.  Since  the
         Corporation does not have substantial cash reserves or access to a line
         of  credit,  the  Corporation  will need to  experience  a  significant
         improvement  in operating  results in 1997 over 1996 levels in order to
         meet its on-going obligations, including the interest due on the Notes.
         Operating results in 1997 have improved over 1996 levels, due primarily
         to the positive impact of the availability of the self-parking  garage.
         Although management of the Corporation  believes that operating results
         will  continue to improve over prior year levels,  no  assurances as to
         the  continuation of this  improvement can be given.  Management of New
         Claridge  will   continue  to  conserve   cash  through   various  cost
         containment  measures,  including limiting capital expenditures in 1997
         to approximately $1 million. Given the various improvements made to the
         property in recent years,  including the casino  expansion in 1994, the
         construction of the self-parking garage, and other projects such as the
         refurbishment of all of its guest rooms,  the current  condition of the
         property is such that the above-mentioned level of capital expenditures
         is deemed  adequate.  In January 1997 management of the Corporation was
         contacted,  through an agent, by Hilton Hotel  Corporation  ("Hilton"),
         regarding a possible  sale of the  Corporation  to Hilton,  and shortly
         thereafter,   the   Corporation   began   negotiations   with   Hilton.
         Negotiations with Hilton regarding acquisition of the Corporation ended
         in April  1997 when a  satisfactory  agreement  could  not be  reached.
         Management  of New  Claridge  will  continue  to  pursue  a sale of the
         Corporation  or some other plan for a  significant  infusion of capital
         into the  Corporation.  In addition,  New Claridge has retained the law
         firm of Zelle and Larson  LLP of  Minneapolis,  Minnesota  to assist in
         evaluating the recovery of certain  expenses  incurred in reopening the
         self-parking garage and in evaluating potential lost profit claims as a
         result of the accident  which  occurred in the  self-parking  garage on
         July 10, 1996. Management of the Corporation intends to file a claim to
         recover these expenses and lost profits; recovery of these claims would
         have  a  positive  impact  on  New  Claridge's  financial  results  and
         liquidity.  No formal  claims have been filed to date,  and there is no
         assurance  that the  Corporation  will be  successful  in realizing any
         recovery.

         The Corporation had a net loss of $4,815,000 for the three months ended
         March 31, 1997 compared to a net loss of $3,073,000 for the same period
         in 1996.  During  the first  quarter  of 1997 as  compared  to the same
         quarter  in 1996,  revenues  net of  promotional  allowances  decreased
         $94,000 while expenses  decreased  $403,000 - a decrease in loss before
         income  taxes of  $309,000.  During  the  first  quarter  of 1996,  the
         Corporation recorded a $2,051,000 income tax benefit as a result of the
         losses  incurred in that period.  During the first  quarter of 1997 the
         Corporation  recorded an income tax benefit of $1,801,000,  offset by a
         corresponding  increase in the  valuation  allowance,  resulting  in no
         income tax  provision  or benefit for the three  months ended March 31,
         1997.

         The ownership and operation of casino-hotel facilities in Atlantic City
         are subject to extensive state  regulation under the Casino Control Act
         under the direction of the New Jersey Casino  Control  Commission.  The
         Casino  Control Act provides  that various  categories of entities must
         hold appropriate  casino licenses.  The Partnership  currently operates
         under a four-year casino service industry license effective October 31,
         1995, while New Claridge  operates under a four-year casino  operator's
         license effective September 30, 1995.

(3)      Contingencies

         In connection with the 1989 restructuring,  Webb agreed to permit those
         partners/investors  in  the  Partnership  and  Corporation  ("Releasing
         Partners/Investors")  from whom Webb had received written releases from
         all  liabilities,  rights  ("Contingent  Payment  Rights")  to  receive
         certain  amounts  to  the  extent  available  for  application  to  the
         Contingent   Payment.    Approximately   84%   in   interest   of   the
         partners/investors    provided    releases    and   became    Releasing
         Partners/Investors.  Payments to Releasing Partners/Investors are to be
         made in  accordance  with a schedule of  priorities,  as defined in the
         Restructuring Agreement.

         On April 2, 1990,  Webb  transferred  its  interest  in the  Contingent
         Payment to an  irrevocable  trust for the  benefit of the Valley of the
         Sun United Way, and upon such transfer  Webb was no longer  required to
         be qualified or licensed by the Commission.

         On February 23, 1996, the  Corporation  acquired an option to purchase,
         at a discount from the carrying  value,  the  Contingent  Payment.  The
         price to  acquire  the  option  was $1  million,  and the option may be
         exercised  any time prior to December  31, 1997.  Upon  exercise of the
         option,  the  purchase  price of the  Contingent  Payment  would be $10
         million,  plus interest at 10% per annum for the period from January 1,
         1997 to the date of payment of the purchase  price.  The purchase price
         may also  increase  in an amount  not to exceed  $10  million if future
         distributions to Releasing Partners/Investors exceed $20 million. It is
         estimated that at March 31, 1997, the aggregate amount owing in respect
         of the Contingent Payment was $68.2 million.

         Given the recent  operating  results at New  Claridge  (see  discussion
         above),  it is unlikely that the Corporation  would be able to exercise
         this Contingent  Payment Option using  available  working  capital,  or
         absent a refinancing or sale transaction.

         In the event that the option is exercised,  it is anticipated  that the
         Contingent  Payment  would be canceled so that neither the  Corporation
         nor the  Partnership  would have any  obligation to make any payment in
         respect of the  Contingent  Payment  before  making a  distribution  to
         limited partners or shareholders.  Upon the purchase and  cancellation,
         however,  the Corporation and the Partnership would remain obligated to
         make  payments to the Releasing  Partners/Investors,  in respect of the
         Contingent  Payment  Rights,  before  any  distribution  may be made to
         limited partners or  shareholders.  These payments would be required to
         be in the  same  amounts  as if the  Contingent  Payment  had not  been
         purchased  and  canceled.  As a result,  it is not likely that  limited
         partners or shareholders who are not Releasing  Partners/Investors will
         receive any distribution  from the Partnership or the  Corporation.  In
         the aggregate,  Releasing Partners/Investors are entitled to receive an
         amount  equal to  approximately  72% of the  Contingent  Payment if the
         option is exercised.

         Under the terms of the option, upon purchase of the Contingent Payment,
         the  Partnership  and/or  the  Corporation  would be  required  to make
         distributions    in   excess   of   $7   million   to   the   Releasing
         Partners/Investors.  The Partnership and the Corporation have agreed to
         cooperate  in the  purchase of the option and the  Contingent  Payment,
         with each contributing one-half of the purchase price of the option and
         each  anticipated  to contribute  one-half of the purchase price of the
         Contingent  Payment. A portion of the Partnership's  contribution would
         be contributed through additional abatements of basic rent payments due
         under the Operating Lease and the Expansion Operating Lease.


<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Condition and 
          Results of Operations

Results of Operations for the Three Months Ended March 31, 1997
as Compared to the Three Months Ended March 31, 1996

Rental  income for the three months ended March 31, 1997  increased  $183,000 as
compared  to the  three  months  ended  March 31,  1996.  New  Claridge  pays as
additional  rent,  certain  expenses  and debt  service  relating to  furniture,
fixture and equipment  replacements and building improvements  ("FF&E").  During
1997,  FF&E note  principal  and  interest  payments  were  higher than in 1996,
resulting in increased rents in 1997.

The Partnership has an agreement with New Claridge whereby New Claridge provides
facility  maintenance and engineering  services for the Claridge.  The agreement
calls for the  reimbursement  of the actual  facilities  and  maintenance  costs
incurred on the  Partnership's  behalf.  The cost of  maintaining  and repairing
Hotel  Assets  decreased  $287,000  for the three months ended March 31, 1997 as
compared to the three months ended March 31, 1996, due to an overall decrease in
New Claridge's  repairs and  maintenance  expenditures  in an effort to conserve
cash.

For the three months ended March 31, 1997,  interest expense decreased  $362,000
as compared to the same period  ended March 31, 1996 due to  principal  payments
made during 1996 and 1997 that  reduced the average  outstanding  balance of the
wraparound and expansion mortgages.

Depreciation and amortization  expense for the three months ended March 31, 1997
decreased  $290,000 as compared to the three months ended March 31, 1996. Assets
purchased  during the 1986  expansion  became  fully  depreciated  in  mid-1996.
Therefore,  depreciation  expense taken on these assets during the first quarter
of 1996 was not  available  during  the  first  quarter  of 1997,  resulting  in
decreased depreciation expense in 1997.

Liquidity and Capital Resources

The  ability of the  Partnership  to  continue  to fulfill  its  obligations  is
dependent  upon the ability of New Claridge to continue to make rental  payments
when due.  Current lease payments from New Claridge,  as recently  amended,  are
sufficient to pay the Partnership's debt service and operating expenses. As part
of the 1989 Restructuring  Agreement,  rental payments in excess of monthly cash
flow requirements were deferred or abated so that excess cash does not currently
accumulate in the Partnership. The 1997 restructuring continued this deferral or
abatement  of  excess  cash  flow  through  1998.  At the  Closing  of the  1989
restructuring  the  Partnership  loaned New  Claridge  $3.6  million.  The note,
including interest, along with those rentals deferred under the amendment to the
operating  leases,  are to be  repaid  to the  Partnership  upon (i) the sale or
refinancing  of the  Claridge;  (ii) upon full or  partial  satisfaction  of the
Expandable  Wraparound  Mortgage;  and (iii) upon full satisfaction of any first
mortgage then in place.  The deferral of $1.3 million of rental  obligations  as
part of the 1997  restructuring  leaves the  Partnership  with  minimal cash and
liquidity.

The Operating Lease, together with the Expansion Operating Lease, was amended as
part  of the  1989  Restructuring  Agreement  to  provide  for the  deferral  of
$15,078,000  of rental  payments  during the  period  July 1, 1988  through  the
beginning of 1992, and to provide for the abatement of $38,820,000 of basic rent
through  1998,  thereby  reducing  the  Partnership's  cash  flow  to an  amount
estimated  to be necessary  only to meet the  Partnership's  cash  requirements.
During the third quarter of 1991, the maximum  deferral of rent was reached.  On
August 1, 1991,  the  Operating  Lease and the  Expansion  Operating  Lease were
amended further to revise the abatement  provisions so that,  commencing January
1, 1991,  for each  calendar  year through 1998,  the lease  abatements  may not
exceed $10 million in any one calendar year,  and  $38,820,000 in the aggregate.
Additional  abatements of rent totaling $500,000 were also available as a result
of the acquisition of the option to purchase the Contingent Payment.  During the
first quarter of 1997, all of these abatements were fully utilized.

The Fifth  Amendment  to the  Operating  Lease and the Fourth  Amendment  to the
Expansion  Operating Lease, which were effective on March 1, 1997,  provided for
the  abatement of $867,953 of basic rent and for the deferral of  $1,300,000  of
basic rent on March 1, 1997,  and provide  for  additional  abatements  of basic
rent, commencing on April 1, 1997, as necessary to reduce the Partnership's cash
flow to an amount necessary to meet the Partnership's cash requirements  through
December 31, 1998  (determined  without  regard to the repayment of the deferred
rent). The $1.3 million of basic rent deferred on March 1, 1997 is to be paid to
the Partnership in monthly  installments of $25,000 for the period April 1, 1997
through December 31, 1997, and monthly installments of $50,000 for the year 1998
and  thereafter  until  paid in full  (subject  to  acceleration  under  certain
circumstances).  For the years 1999 through 2003, additional abatements of basic
rent will be reduced to provide the Partnership  with amounts needed to meet the
Partnership's  cash requirements plus an additional amount ($83,333 per month in
1999 and 2000,  $125,000  per month in 2001,  and $166,667 per month in 2002 and
2003).

In conjunction  with the Fifth  Amendment to the Operating  Lease and the Fourth
Amendment to the Expansion Operating Lease, as discussed above, the Corporation,
New  Claridge  and  the  Partnership  entered  into a  restructuring  agreement,
effective  March 1, 1997, to modify certain terms of the  Expandable  Wraparound
Mortgage.  In addition,  under the March 1, 1997  restructuring  agreement,  New
Claridge  agreed  to  exercise  the  first of  three  ten-year  renewal  options
extending the term of the Operating Lease and Expansion  Operating Lease through
September 30, 2008.

Under the terms of the Operating Lease, as amended  effective March 1, 1997, New
Claridge has an option to purchase,  on September 30, 1998, the Hotel Assets and
the  underlying  land for  their  fair  market  value at the time the  option is
exercised.  As amended  effective March 1, 1997, such price may not be less than
an amount equal to the amount then outstanding  under the Expandable  Wraparound
Mortgage plus $2.5 million, plus any amount of the $1.3 million of rent deferred
on March 1, 1997 not then paid. If New Claridge does not exercise this option on
September  30, 1998,  it may  exercise an option,  on  September  30,  2003,  to
purchase the Hotel Assets and the underlying  land on January 1, 2004, for their
fair market value at the time the option is exercised.

Basic rent during the renewal  term of the  Operating  Lease will be  calculated
pursuant to a formula, with such rent not to be more than $29.5 million nor less
than $24 million in the lease year October 1, 1998 through  September  30, 1999,
and  subsequently,  not to be greater  than 10% more than the basic rent for the
preceding  lease  year in each  lease year  thereafter.  Basic  rent  during the
renewal term of the Expansion  Operating Lease will also be calculated  pursuant
to a formula,  with such rent not to be more than $3 million  nor less than $2.5
million in the lease year  October  1, 1998  through  September  30,  1999,  and
subsequently,  not to be  greater  than 10% more  than  the  basic  rent for the
preceding  lease year in each lease year  thereafter.  Therefore,  the aggregate
basic rent  payable  during the initial  years of the renewal term of the leases
will be significantly below the 1997 level.

The  Partnership  funds the  purchase of  additional  Hotel  Assets by borrowing
funds, at a 14% interest rate, from New Claridge.  The ensuing notes are secured
under the  Expandable  Wraparound  Mortgage  up to $25  million.  Principal  and
interest  on  these  notes  are  then  reimbursed  to  the  Partnership  through
additional rentals from New Claridge. Under the Operating Lease, New Claridge is
required to reimburse the Partnership for all taxes, assessments,  insurance and
general and administrative costs of the Partnership.

The Partnership had a working capital deficiency of approximately $18,632,000 as
of March 31, 1997 and  $17,084,000 as of December 31, 1996. The working  capital
deficiency  primarily  results from the  consummation of the 1989  Restructuring
Agreement as well as the 1997 restructuring.  As part of the 1989 restructuring,
the  Partnership's  cash flow was reduced to an amount no greater  than what the
Partnership  needs to pay  Partnership  expenses,  including debt service.  Such
concept was continued through 1998 in the 1997  restructuring.  Thus, so long as
the Claridge is financially  viable and continues to make all payments under the
operating  leases,  the  Partnership  expects  to be  able  to pay  its  current
liabilities.



<PAGE>



                                     PART II

Item 6.         Exhibits and reports on Form 8-K

                (a) Not applicable.
                (b) No reports on Form 8-K were filed  during the quarter  ended
                    March 31, 1997.




                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                 Atlantic City Boardwalk Associates, L.P.
                                   Registrant





Date   May 14, 1997                          /s/  Anthony C. Atchley
     ------------------                      -----------------------------------
                                         by  Anthony C. Atchley, 
                                               General Partner


Date   May 14, 1997                           /s/  Gerald C. Heetland
     -------------------                     -----------------------------------
                                         by  Gerald C. Heetland, 
                                                General Partner


Date    May 14, 1997                          /s/  Anthony C. Atchley
     --------------------                    -----------------------------------
                                         by  AC Boardwalk Partners Corporation, 
                                                General Partner 
                                         by  Anthony C. Atchley, President