The threat of possible bankruptcy for Atlantic City’s municipal government now seems unlikely as the city has bonded for million to repay tax judgments brought by successful casino tax appeals.
The administration of New Jersey Governor Chris Christie had announced that the state team in charge of the city’s finances had settled all of the remaining casino tax appeal cases facing the city. At one time, the city faced nearly $500 million in debt mostly due to costly tax judgment won by its casinos.
Though city officials opposed the state’s takeover of the city finances in November, the tax settlements were met as welcome news.
Atlantic City City Council President Marty Small told the local Press of Atlantic City that the payments will be “good for the future of Atlantic City.”
“The tough part is over and it should lead to much-needed fiscal sustainability for the residents of Atlantic City,” he said.
Details of the settlements have not been released, but Christie previously said the $80 million ordinance would cover all of the cases. The settlements include several casino appeals with billionaire Carl Icahn the Press reported. Icahn owns the Tropicana casino and the shuttered Trump Plaza casino. Icahn also owned the Trump Taj Mahal before selling it to Hard Rock International.
The agreement settles tax appeals for Tropicana from 2015 and 2016, and Taj for 2014 through 2016 and for Trump Plaza from 2014 through 2017.
The state had previously made a settlement with the Borgata casino which was owed 165 million. That settlement was for $72 million.
In another sign the city is on the mend, the president of the American Gaming Association Geoff Freeman appeared at an association event at nearby Stockton University and said that the city is moving in the right direction.
He pointed to Hard Rock’s plans to re-open the former Taj Mahal in 2018, as well as a proposed joint venture between MGM Resorts International and Caesars Entertainment Corp., and the possible reopening of the former Revel, now known as TEN, according to the Press.
“The Atlantic City market is an exciting market right now,” Freeman said “There is no doubt the market right-sized itself over the last couple of years. While the closing of the facilities was painful for many, it strengthened the community; it strengthened Atlantic City’s potential for the future.
“What is exciting is that people are spending money in the city and not taking it out of the city,” Freeman said. “I think that should give people confidence and a quiet optimism about the future.”
He also pointed to the state’s court battle to allow sports betting—now before the U.S. Supreme Court—saying Atlantic City was uniquely prepared to take advantage of sports betting should it win the decision.
