The Borgata Hotel Casino & Spa will be refunded more than million in a settlement with Atlantic City over the casino’s ongoing appeals of its tax assessment.
The Borgata’s parent company, Boyd Gaming, announced the settlement in a filing with securities regulators. The settlement covers tax years 2011 through 2014.
According to the Associated Press, Borgata will be refunded $88.25 million for tax years 2011 through 2013, as well as receiving an estimated tax credit of $17.85 million for the tax year 2014. The city also has agreed to an unspecified lower tax assessment on the casino for 2015.
In return, Borgata agreed to drop its appeals of its tax assessments from 2011 through 2015.
City officials said the settlement sets the Borgata’s new assessment higher than the casino had sought, but did not specify the new amount, according to the local Press of Atlantic City.
“By reaching this agreement with the city’s largest taxpayer, we have eliminated significant uncertainty regarding future budgets,” Atlantic City Mayor Don Guardian said in a press statement. “We see this as another positive step toward stabilizing our tax base. In addition, this provides our city with much-needed flexibility, and will save considerable legal fees and borrowing costs.”
The settlement, however, does not affect the casino’s ongoing appeal of tax assessments for 2009 and 2010. A state tax court has already ruled that Borgata is due an additional refund of $48 million, plus interest, after the city over-assessed the casino’s value.
That ruling led to several other city casinos filing tax appeals. Settling the appeals has become a major priority of the city as the Tax Courts have largely accepted the casino’s argument that the resort’s shrinking casino revenue has left many properties over-assessed.
The Borgata was paying $58 million a year in property taxes, a significant part of Atlantic City’s $249 million budget as of 2013. The city had assessed the casino’s tax value at $2.3 billion, but the tax court set the values at $880 million for 2009 and $870 million for 2010.
Other appeals have come from Trump Plaza and the Trump Taj Mahal, the Tropicana Casino and Resort and Caesars Atlantic City.
