Legal fight over Revel's unpaid debts to A.C.

Lawyers for Atlantic City and the bankrupt Revel Casino Hotel are locked in an intensifying battle over as much as $30 million that Revel owes for property taxes and penalties.

Atlantic City wants to sell the right to collect that money by auctioning a tax certificate on Dec. 11, but it can't do that without bankruptcy court permission. The city asked for that permission last month, saying it desperately needs the money to meet its budget.

Revel's property-tax levy this year of about $38 million - based on an assessment of $1.15 billion - equals 19 percent of Atlantic City's $200 million in expected tax collections.

So far this year, Revel has only paid $7.3 million.

In a bid to gain leverage over the city, Revel's lawyers this week began trying to reopen Revel's 2013 bankruptcy, which included a settlement with the city establishing a $1.15 billion assessment for 2013 through 2015.

The goal is to get that settlement overturned by a bankruptcy judge. Revel's argument now - with a different set of lawyers - is that setting assessments in advance is against New Jersey law.

Brookfield Asset Management, a Toronto real estate investment manager, has agreed to buy Revel for $110 million. A closing date has not been set.

A hearing on the property-tax fight is scheduled for Wednesday.

Brookfield's willingness to invest $110 million in Atlantic City was seen by many as a positive sign for the market, but a bond sale by the New Jersey Casino Reinvestment Development Authority revealed investor doubts about the future of Atlantic City's tourism market.

On Wednesday, the CRDA sold $241 million in bonds that had garnered investment-grade ratings. However, investors demanded junk-bond-level yields to buy the bonds, which are backed by taxes on Atlantic City hotel rooms, alcoholic beverages, and entertainment, Bloomberg News said.

Bonds maturing in November 2044 were priced to yield 4.69 percent, compared with 3.97 percent for a benchmark index of similarly rated bonds, Bloomberg said.