February 05, 2016
With Atlantic City potentially on the brink of insolvency, Borgata Hotel & Casino has threatened to stop paying real estate taxes until the city pays back $62.5 million in court-ordered refunds for overpayments made in 2009 and 2010.
According to the Press of Atlantic City, the Borgata is seeking a total of $170 million in refunds for overpayments dating back six years and now plans to offset $62.5 million with approaching tax bills. If Borgata, Atlantic City's biggest taxpayer, refuses to pay up, the consequences "would be devastating to Atlantic City," Mayor Don Guardian said.
Last month, Atlantic City Emergency Manager Kevin Lavin estimated that the city would run out of cash in April, possibly threatening essential municipal services. Without Borgata's tax payments, Atlantic City could be without available funds as soon as Feb. 24, an attorney representing the city said Friday in court.
New Jersey Governor Chris Christie recently proposed a financial takeover package to be administered by the state, a move that would allow a New Jersey board to restructure Atlantic City's municipal debt and consolidate or privatize city services. Mayor Guardian has opposed the idea, but acknowledged the city needs a similar authority to renegotiate onerous tax refunds and rewrite union employee contracts.
In November, Christie vetoed a rescue package intended to help stabilize the gambling hub, which saw four of its 12 casinos close last year. Had the bills been signed, at least $33.5 million in casino revenue would have been redirected to the city, whose debt stands at approximately $400 million.
An attorney representing Borgata said Friday that the casino has been "tremendously patient," but it can no longer wait after years of delays.
Despite Guardian and City Council members calling for Atlantic City to file for bankruptcy protection, Governor Christie and state Senate President Stephen Sweeney continue to advocate for the financial takeover package, which would be managed by the Department of Community Affairs. That bill is expected to be introduced in the Legislature next week.
