Atlantic City has filed an appeal to a recent Tax Court ruling that the Borgata Casino Hotel & Spa had been over-assessed in 2009 and 2010 and is owed a million tax refund from the city.
The appeal, filed in November, charges that the Tax Court considered erroneous evidence in several instances and the “court erred, and acted arbitrarily and abused its discretion,” according to the appeal.
The court ruled in October that the Borgata’s properties had been over-assed at 2-and-a-half times their actual values. The casino’s valuation was lowered from $2.26 billion to $870 million. The court noted in its decision that the Atlantic City casino market and its revenues have been steadily shrinking over the last several years.
Flemington-based lawyer Richard M. Conley, a former state Tax Court judge, was hired by the city to handle the appeal.
The complaint says the court used the conclusions of an expert provided by the casino as its basis for determining the casino’s valuation and the conclusions lacked foundational analysis. The court also based its decision on the casino’s income, which the complaint alleges is a flawed method since casinos are distinct from other types of properties.
The complaint further alleges that the court created a different valuation standard for casinos, rather than using uniform rules. The complaint also questioned the court’s conclusions about the Atlantic City casino market saying the court used facts about the national economic and regional market conditions, which “were arbitrarily found to have detrimentally impacted the Atlantic City gaming market.”
The city could be liable for interest on the ruling while the appeal is underway, according to published reports.
Meanwhile the city is still reeling from other tax appeals by city casinos and now the loss of The Atlantic Club casino, which was sold last month at auction. Tropicana Casino & Resort and Caesars Entertainment Inc.—which owns four rival city casinos—will buy the Atlantic Club for $23.4 million and shut it down.
Since 2008, Atlantic City has lost a third of its tax base because of casino tax appeals, and has been borrowing to pay-off most of those refunds.
