Atlantic City casinos: End stalemate that is killing A.C.

As the great Atlantic City impasse of 2016 continued with the city on the verge of folding its cards, at least temporarily, and Gov. Christie, legislators and city officials unable to agree on a path that avoids insolvency, the Casino Association of New Jersey issued a plea to politicians to "salvage a viable solution."

The statement was issued Wednesday morning, a day after Christie told reporters not to blame him if the city went bankrupt, and two days after Mayor Don Guardian said the city would shut down its City Government and end non-essential services between April 8 and May 2, when it expects to collect quarterly taxes. 

"The inability to enact legislation to address our region’s very unique situation has left city residents, the industry, and the hardworking families that rely on casinos and other city businesses for their livelihood in limbo with no path forward," the association, which represents Atlantic City's casinos, said in the statement.

"Politics and inertia have combined to form an impasse and with each day that passes, the situation becomes more grave," the statement said. "There is still time to salvage a viable solution, but clearly the time to act is now."

Meanwhile, the Press of Atlantic City reported Wednesday that casinos successfully lobbied at the last minute to get a provision added to the so-called PILOT bill that allows them to opt out of the Payment in Lieu of Taxes system if lawmakers are successful in authorizing two casinos in North Jersey.

The bill has passed the state Senate but has not been voted on by the Assembly, which has also not taken up a state takeover bill that is opposed by city officials.

The opt-out provision potentially undermines the purpose of the PILOT bill: which is designed to ensure tax stability over a ten year period and prevent the tax appeals that are choking the city's finances.

Atlantic City currently owes Borgata Hotel and Casino more htan $170 million stemming from successful tax appeals and settlements. Borgata withheld its last quarterly tax payment of $7.2 million, about the same amount the city sought as a loan from the state to continue functioning through the end of April. 

Atlantic County Executive Dennis Levinson, who has been a vocal opponent of the PILOT bill, said the opt out provision "negates the reason they claim they need a PILOT."

"If the premise of the pilot was to stop the bleeding and prevent casinos from appealing their assessments, obviously this negates the reason they claim they need a PILOT," Levinson said. "Now you’re allowing them to appeal their assessment if North Jersey has casinos."

The amended bill, which was adopted March 14 before a full Senate vote, but not reported on until Wednesday, allows the casinos to withdraw from the PILOT system, "upon the commencement of the operation of a casino gaming facility in New Jersey that is located outside of Atlantic City."

The PILOT system was originally the idea of the Casino Association, which authored the original bill and is represented by Phillip Norcross, brother of South Jersey Democratic power broker George Norcross. Phillip Norcross also represents New Jersey American Water, which has expressed interest in buying or leasing Atlantic City's much-sought after Municipal Utility Authority, valued at $100 million.

The Press reported that the casinos lobbied Gov. Christie's office for the change in the PILOT bill, and that request was relayed to State Sen. President Stephen Sweeney. The amendment was added at committee. The full Senate passed the PILOT bill with amendments _ versions of which were twice vetoed by Christie, and which sets a base of $120 million payment for all the casinos to make collectively in lieu of assessed real estate taxes _ but it has not been voted on by the Assembly.

Sweeney supports both the PILOT bill and the North Jersey casino referendum, which will be put on the ballot for voters to consider in November.

Also Wednesday, Borgata announced its new $14 million nightclub Premier will debut April 8, coincidentally the same day Mayor Guardian has said he will essentially shut down city government for three weeks.

Also Wednesday, Bob McDevitt, president of UNITE HERE Local 54, the casino workers union, issued a statement saying that Atlantic City being on the brink of bankruptcy puts thousands of jobs at risk, jeopardizes the casino industry and invites "disaster" for the region's economy.

"Bankruptcy would be a disaster for everyone, including the casino employees who would suffer the consequences that could spill over to the gaming industry," McDevitt said. "A shutdown of the City would put city employees out of work and a bankruptcy would put all the decisions in the hands of a bankruptcy judge."

McDevitt noted that the industry "has begun to turn around. Operating profits at the casinos are up, revenues are up, debt service payments are down, and customers are coming back."

He noted that the experience of the Taj Mahal workers who fought new owner Carl Icahn ended up with their union contracts negated and a loss of health benefits and pensions. "Anyone who thinks bankruptcy would be a better option for preserving collective bargaining agreements, jobs and benefits should look at recent history as a guide," he said.

The full statement from the Casino Association is as follows:

"There is agreement among everyone with a stake in Atlantic City’s future that the city’s financial situation is dire. Well over a year ago, state lawmakers stepped in to propose legislation that would have moved the city along the road to fiscal health.

"Politics and inertia have combined to form an impasse and with each day that passes, the situation becomes more grave. The inability to enact legislation to address our region’s very unique situation has left city residents, the industry, and the hardworking families that rely on casinos and other city businesses for their livelihood in limbo with no path forward.

We once again call on our state’s lawmakers and the administration to move forward with a plan for Atlantic City and end the stalemate that threatens the city’s future. There is still time to salvage a viable solution, but clearly the time to act is now."