One of the consequences of New Jersey’s plan to keep Atlantic City out of bankruptcy is that the New Jersey Casino Reinvestment Development Authority will no longer get casino reinvestment development funds.
That money—about $20 million assessed from the city’s casinos—will now go to the city’s government to help pay down its massive debt. The money comes from a 1.25 percent tax on gross gaming revenue and a 2.5 percent tax on internet gaming revenues.
“I think they’re going to take about $18 million or $20 million a year. It hasn’t affected the budget as much as it will affect in the future our ability to do things,” CRDA board chairman Bob Mulcahy told the local Press of Atlantic City. “We have to figure out how we’re going to be creative and overcome those issues. And frankly, some of it is going to depend on how they restructure the city of Atlantic City and how much they need help to do that.”
The authority will say goodbye to Executive Director John Palmieri, who will be replaced by Chris Howard, deputy director of the authority. Palmieri was hired in 2011 and has a background in development projects.
Howard is an attorney who has previously worked for the state’s Authority Unit, which oversees New Jersey’s independent state and bi-state authorities and has ties to Governor Chris Christie, according to the Press.
The CRDA was formed in 1984 and has funded more than $2.1 billion in projects throughout the state, according to authority records. Even without reinvestment money, the authority still runs the city’s tourism district.
In some other Atlantic City notes:
Jeffrey Chiesa, who was appointed to head the state takeover of Atlantic City’s finances will make $400 an hour according to a state retention agreement cited by the Press.
Partners at Chiesa’s law firm, Chiesa Shahinian & Giantomasi, can also bill taxpayers $350 an hour, according to the agreement with the Office of the Attorney General. Associates can charge $240 an hour, and paralegals can bill $90 an hour, the Press reported.
Chiesa is a former U.S. senator from New Jersey and state attorney general and is a close ally of Christie. He has been given sweeping authority over the city’s finances as part of a state takeover designed to get the city out of a fiscal crisis and massive debt.
The high rate brought opposition.
“I’m deeply concerned with the potential for unlimited bills piling up over the next couple of months, all at the taxpayers’ expense,” Assemblyman Vince Mazzeo told the paper. “I’d greatly prefer a set contract for a certain amount of money to Sen. Chiesa and his firm.”
Also, Al Sharpton appeared at a rally in the resort and called the state takeover unconstitutional.
“Atlantic City is now a colony,” Sharpton said. “Anytime they come in and suspend your elected officials and put an unelected czar over you, if you aren’t angry about that there is something wrong with you.”
Sharpton leads the National Action Network and was promoting a planned Jan. 14 march on Washington.
