The New Jersey Department of Community Affairs has named former New Jersey senator Jeffrey Chiesa—a close ally of Governor Chris Christie—to oversee the state’s takeover of Atlantic City’s finances.
Chiesa, 51, served as senator for New Jersey after filling the vacant seat of the late Frank Lautenberg. He served for four months, but did not seek a full term. He has also been Christie’s chief counsel and is a former New Jersey Attorney General.
The state has moved to take over the resort’s finances as part of a series of rescue bills passed to aid the struggling resort and attempt to keep it from bankruptcy. Under the bills, city officials had a chance to stop the takeover by developing a five-year plan for the resort’s financial stability, but the DCA rejected the city’s plan earlier this month.
The city is facing an about $100 million budget deficit and about $500 million in debt it can’t currently pay back. The appointment gives Chiesa power to sell city assets, hire or fire workers, veto City Council minutes and break union contracts.
“I am committed to improving essential government and community services for the people of the Atlantic City,” Chiesa said in a statement. “I will listen to the people and work hand in hand with local stakeholders to create solutions that will prevent waste and relieve generations of taxpayers from the burden of long-term debt. We will put Atlantic City back on a path to fiscal stability.”
Christie said Chiesa will not be afraid to make difficult decisions in fixing the city’s finances.
“He’s an outstanding lawyer but more importantly than that he is an outstanding person who cares about getting the city of Atlantic City back on track in working with the people of Atlantic City and the leaders of Atlantic City to get the hard things done,” Christie said on a local radio show. “Because if we make the difficult decisions now and do the difficult things, there is no limit to Atlantic City’s future.”
Chisea met with Atlantic City officials including Mayor Donald Guardian last week, but officials said few specifics of the takeover were discussed. Guardian did tell the Press of Atlantic City that the city’s controversial plan to sell its former municipal airport Bader Field to its independent Municipal Utilities Authority appears to be dead. The city had hoped to raise $100 million with the sale, but it was always unclear if the authority could take on that much bond debt.
Chisea told the Press he wasn’t sure what his first steps will be in the city and how his decisions will be made public.
However, a Department of Community Affairs press statement said the state’s immediate steps include entering into agreements with casinos over payments in lieu of property taxes and ensuring debt, school and county tax payments are made on time. Chiesa also will explore right-sizing the city’s work force and pursue financing to reduce the city’s debt, the statement said.
The statement also said the city’s mayor and City Council will maintain “day-to-day municipal functions,” while Chiesa and state officials will implement fiscal-recovery efforts.
Guardian said the meeting was simply and introduction and that the city still has not decided whether it will challenge the takeover in court.
“I think we leave all options open at this point,” Guardian said. “There was nothing to indicate that they were going to take actions that we found either unconstitutional or a civil rights infringement.”
The state also paid the city’s $8 million school property-tax payment and $5 million Atlantic County property-tax payment out of transitional aid the city is to receive, Guardian told the Press.
During his radio interview, Christie said he wished the takeover hadn’t been necessary, but said the city’s proposed fiscal plan was too unbalanced.
“Nobody wanted this result, but unfortunately this is where we are, and it’s much more important to get these things done the right way than it is to worry about soothing people’s feelings,” Christie said.
Christie said he does hope the takeover will be completed sooner than the five years outlined in the rescue package bills.
Chiesa’s salary has not been set and the DCA said his appointment has not been finalized.
