Atlantic City has been losing tax revenue from casinos by the millions this year and is now trying to get what it can from the closed Revel casino.
The city asked a bankruptcy judge to allow a tax sale for about $30 million in unpaid taxes owed by the casino. The city is seeking to have the court lift bankruptcy stays that halts lawsuits and prevents creditors from seizing assets.
If Judge Gloria Burns approves, the city intends to auction off the rights to collect the unpaid taxes at a December 11 sale. The sale could double interest charges on the taxes to 18 percent in addition to adding significant penalties.
During a preliminary hearing, Burns asked the two sides to try and settle the matter out of court, but said she would rule this week is no agreement is reached.
Revel’s total annual tax bill this year will be $37 million, roughly 18 percent of the city’s total fiscal budget and 10 percent of the city’s total revenue from tax collections, according to a Wall Street Journal review of court papers.
Revel officials say that any tax sale should be postponed until the casino and city settle a challenge of the casino’s 2014 tax assessment.
Lawyers for Revel said they would also accept a deal in which the city agreed to a “net neutral” sale that doesn’t increase the interest rate or add other costs, according to the Journal.
The fight continues as the property is scheduled to be sold. Toronto-based Brookfield Property Partners LP, which also owns Hard Rock Hotel and Casino Las Vegas, won an auction for the Boardwalk property with a bid of $110 million in cash last month.
