New Jersey has issued more than million in bonds to pay the tax settlements it negotiated with seven Atlantic City casinos.
The bonds—which must be paid back by the city—were sold at an “attractive” 4.1 interest rate, according to a press release from the state.
The bonds cover settlement agreements with Bally’s Atlantic City, Caesars Atlantic City, Golden Nugget Atlantic City, Harrah’s Resort, Tropicana Atlantic City, and the now-closed Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino.
“Atlantic City is now getting excellent access to the bond market, which is amazing for a city that was contemplating bankruptcy before we stepped in to manage its finances,” said Jeffrey S. Chiesa, the head of the state’s team which is managing the city’s finances. “The fact that the city obtained bond insurance and sold the bonds at a low-interest cost means it is well-positioned to responsibly pay down the tax refunds it owes to casinos while preserving critical public services.”
The bonds were sold under New Jersey’s Municipal Qualified Bond Act program and will finance property-tax appeals totaling about $71.1 million.
According to a report in the Press of Atlantic City, the appeals covered 2016 for Bally’s, Caesars, Golden Nugget and Harrah’s; for the years 2015 and 2016 for Tropicana; for the years 2014 to 2016 for the former Taj Mahal; and for the years 2014 to 2017 for the former Trump Plaza.
The state had previously reached a $72 million tax settlement with Borgata Hotel Casino & Spa.
In a related story, the settlements could help the city make about $38 million in deferred payments for health and pension obligations in its 2018 fiscal budget, the Press reported. The payments date from 2015, but were deferred as the city faced nearly $500 million in debt at the time.
