Atlantic City finances weaken: report
Will Jimmy Buffett, Bass Pro turn the tide?
Atlantic City finances weaken: report
Joseph N. DiStefano
Atlantic City's debt, already rated Baa1, could be cut further as its casinos continue to lose customers and value, writes Vito Galluccio, analyst at Moody's Investors Service, in a report to clients today.
Atlantic City real estate property values -- mostly casinos -- has fallen by more than a quarter in value since 2008, to around $16.6 billion, Galluccio reports. (The Borgata is the most valuable property at $1.8 billion, followed by Harrah's Marina at $1.5 billion, the bankrupt Revel at $1.2 billion, and Caesars and the Trump Taj Majal at $1 billion each.)
With Revel bankrupt, with Trump Plaza close to a sale deal for just $20 million (it's still assessed at around $250 million), casinos are demanding huge property tax refunds which the city can ill afford. This plus the rise in local unemployument to a national high of 20%, and the rise in the local poverty rate, are all symptoms of the continued drop in gamblers -- to 29 million last year from 35 million in 20005 -- as more are caught by casinos in Pennsylvania, Delaware and New England, Galluccio notes. The city can't keep raising tax rates to balance falling values forever, he warned.
Positive signs: NJ Gov. Chris Christie's approval of A.C.-based online gambling will pour fees into city coffers; and the city is very belatedly attracting non-gambling developments, like a $36 million Jimmy Buffett's Margaritaville beachside bar development, a Bass Pro Shop retail store, and Harrah's $135 million midweek corporate conference center; plus city tourism ads targeting golfers, live shows and, of course, the beach.
