[toc]Atlantic City is going to have to pay $80 million to settle a variety of property tax appeals with casinos. But that’s actually good news for the city as it tries to turn things around after a state takeover of its finances.
AC casino tax settlements a done deal
Earlier this year, Tropicana owner Carl Icahn indicated he would be appealing tax assessments for the shuttered Trump Taj Mahal and Trump Plaza. He also had open appeals for the Trop. Nearly every other casino operator in the city — including Caesars, Bally’s, Harrah’s and Golden Nugget — also had outstanding appeals.
But on Wednesday, all outstanding tax appeals were settled for the city by Jeffrey Chiesa, who is in charge of the city’s finances during the state-mandated takeover, according to the office of Gov. Chris Christie.
“The settlements reached with these casinos are the culmination of my administration’s successful efforts to address one of the most significant and vexing challenges that had been facing the City when we stepped in last November to stabilize the City’s finances,” Christie said.
“Because of the agreements announced today, casino property tax appeals no longer threaten the City’s financial future. City residents can breathe easier knowing the State put the City in a much better position to preserve public services as it pays down the tax refunds it owes to casinos.”
“The City was overwhelmed by millions of dollars of crushing casino tax appeal debt that they hadn’t unraveled when we arrived last fall,” said Chiesa, a former US senator. “We made it a priority from day one to reach settlement agreements with casinos that are favorable to the City.”
In February, the state negotiated a similar settlement just with Borgata to the tune of $72 million. That brings the total tax settlements past $150 million.
More on the AC settlement
The tax appeals will be paid for with an $80 million bond. That may seem like a steep pricetag, but if the settlement hadn’t gone through, the prospect of the city owing even more — and perhaps even bankruptcy — were on the table. The Borgata settlement alone was about half of the possible value of what was owed to AC’s flagship resort.
Here’s what the settlement covers for the tax appeals:
- 2016 for Bally’s, Caesars, Golden Nugget and Harrah’s
- 2015 and 2016 for Tropicana
- 2014-2016 for the former Taj Mahal
- 2014-2017 for the former Trump Plaza
The state is helping AC turn things around
Christie and the state continue to take credit for a rapid turnaround for AC in the past year, since the state stepped in last November.
The state is also touting these accomplishments:
- An 11.4-percent decrease in the overall city property tax rate for 2017.
- A decrease of more than $50 million to the state budget since 2015.
- An upgraded credit rating for the city.
- New investment in the city, including Hard Rock International taking over the Taj.
While many questioned the state’s involvement in AC’s affairs last fall, it’s clear NJ has done more good than harm.
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