Ever since the state’s takeover of Atlantic City last year, there has been no shortage of debate about the right way to proceed in bringing the once-prosperous casino town back to its glory days.
While campaigning last fall, Gov. Phil Murphy stated more than once that he intended to end the takeover. Among other things, it’s unpopular with residents, local officials, and is costing the state money.
A little background on the Atlantic City takeover
Atlantic City has been in severe financial trouble due to the struggling NJ casino industry, including the closing of five failing casinos within the past four years.
After a failed attempt to submit a five-year plan to avoid bankruptcy, the city had no choice but to succumb to the state.
Former Gov. Chris Christie’s decision to take over Atlantic City in the fall of 2016 was not well received. It came at a time when Christie’s popularity was suffering.
With the state in charge, the city lost its budgetary responsibilities and decision-making powers over critical areas of running the city.
The state gained the power the city lost and can make decisions usually left to local leaders. While it can’t file for bankruptcy on behalf of the city, it can break union contracts, hire and fire workers, restructure debt, and more.
There’s a new administration in town
There are a few signs that Murphy’s position may be shifting, although that is not confirmed.
Last month, Murphy failed to mention ending the takeover when asked specifically about it. Instead, he talked about building a “partnership” between state and local authorities to benefit the city.
More recently, Murphy appointed his former gubernatorial rival Jim Johnson as special counsel to review the takeover. The expectation is for Johnson to help lead the city back into prosperity and return control to local lawmakers.
“Atlantic City is poised for a comeback, and I am sure that Jim’s guidance will play a critical role in the growth and economic revitalization of the city,” Murphy said in a statement at the time of the announcement. “Jim has years of governmental experience and knows how to work with tough budgets, traits that will serve him well in this role.”
Johnson, a former U.S. Treasury Department undersecretary in former President Bill Clinton’s administration, is ready for the challenge.
“We’re in a moment filled with challenges and opportunities, and I am honored that Governor Murphy and Lieutenant Governor Oliver have asked me to take on this important role,” Johnson said.
Plenty of questions remain, however
Jeffrey Chiesa, a longtime friend of Christie, was hired by the Christie administration to oversee the takeover. In the announcement, there was no mention of Chiesa’s role changing in the future. For now, we can expect Johnson to support, rather than take over, the effort.
Johnson will earn $1 per year for his services. On the opposite end of the spectrum, Chiesa’s law firm has charged the state upward of $4 million for their role in overseeing the takeover.
When in office, Christie defended the cost as well worth the effort. Others, however, question the amount. Based on the law that Christie signed, the state can remain in control of the city for up to five years.
Even though there is some movement from the Murphy administration, the long-term plan remains unclear. For example, Murphy is a friend of the unions. Some are hopeful that his approach to the takeover will be less heavy-handed than Christie’s.
There is no argument that getting Atlantic City back on its feet is good for the city and the state. In the world of NJ casino and gambling news, it is a hot issue. But it’s evident that the Murphy administration is, for the time being, placing its confidence in Johnson to help make that happen.