Atlantic City’s plan to sell off casino tax liens did not work out as hoped.
The city drew only one bid for $22 million of debt owed by the Trump Taj Mahal and no bids for $31 million in tax debt owed by the closed Revel casino.
The city was hoping to close part of an about $70 million shortfall in its municipal budget.
Michael Sklar, an Atlantic City attorney, was the sole bidder, according to Michael Stinson, the city’s revenue director.
“The city’s obviously disappointed,” Stinson, told Bloomberg News.
The city also received bids for about $2 to $3 million for taxes owed by non-casino properties. Stinson did say that the infusion of cash—though less than hoped—has left the city in good shape to continue operating.
In a related move, city Mayor Donald Guardian canceled a planned November municipal bond sale for as much as $140 million that would have helped cover losses in the city’s tax base from successful casino appeals. The city now plans a $40 million note sale by year end, Stinson said.
“Our financial advisers and underwriters on the deal felt that with the uncertainty surrounding Atlantic City, it was not the right time to go to the capital markets and borrow $140 million,” Stinson told the news service. “When we will enter the market next, I don’t know.”
Moody’s Investors Service cited the reduced bond sale as a reason for putting the city’s finances under review. The review should be completed by January, officials said.
