Atlantic City has 80 million reasons to be thankful for state takeovers.
While Atlantic City leaders and residents recoiled at the prospect of that takeover back in November, it looks like a saving grace now.
Last week, Gov. Chris Christie announced the state had reached an $80 million settlement regarding the city’s property tax debts to seven casinos, effectively ending the money drain that helped cripple its finances.
Christie says state rescued Atlantic City from ‘vexing’ circumstances
According to multiple reports, Christie’s financial team put together a series of bond ordinances to pay the tax debt. We don’t know exactly how much each casino will receive or how much was owed. We do know this is a huge step forward for Atlantic City’s finances.
Christie, never one to shy away from promoting his successes in AC, was quoted on NJ.com as saying the settlement was “the culmination of my administration’s successful efforts to address one of the most significant and vexing challenges that had been facing the city.”
“Because of the agreements announced today, casino property tax appeals no longer threaten the city’s financial future,” Christie added.
Sen. Jeffrey Chiesa, who helped lead the takeover, was quoted as saying his team has neutralized the threat of casino property taxes. Chiesa remarked that “residents can breathe easier” because the city is now in a much better financial position.
The state’s victories are impressive
While we don’t know the amounts that the state will pay to each casino, we do know there’s a good chance it will be less than what was owed.
Chiesa spearheaded the state’s $72 million tax settlement with Borgata Hotel Casino & Spa this past February. The deal was a bargain relative to the $165 million for which the casino was asking.
It’s tough to say exactly why Borgata’s owner, MGM Resorts International, agreed to the deal. But its official statement on the matter may reveal a deeper motivation to settling.
MGM International Executive Vice President John McManus said the company accepted the “reduced payment” because it is “committed to being a catalyst of Atlantic City’s strong and vibrant future.”
MGM may also have been hoping to get as much guaranteed money as possible from the settlement. McManus said as much in other parts of his statement.
However, it’s not hard to imagine NJ casino owners are well aware of the Atlantic City’s noticeable growth during the last eight months and are willing to forgive some debt to keep the momentum going.[i15-table tableid=4289]
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