Revel, awaiting sale, gets tax break in deal with A.C.

ATLANTIC CITY - The Revel has finally won something.

The former Atlantic City casino is getting a big tax break this year under a settlement it reached with the city. It will see its property-tax assessment for 2015 reduced from $625 million to $225 million.

Its 2015 assessment was originally set at $1.15 billion.

Documents filed in bankruptcy court Wednesday show Revel's quarterly tax payment, due Sunday, would have been nearly $10 million. It will now be less than $2 million.

The city has yet to strike a municipal tax rate for 2015, but at current rates, that would indicate an annual tax reduction from $39.52 million to $7.52 million.

Revel, which cost $2.4 billion to build, never turned a profit in its two-plus years of operation, and was shut down in September.

It is being sold to Florida developer Glenn Straub for $95.4 million. The sale is due to close by Feb. 7.

Chris Filiciello, a spokesman for Atlantic City Mayor Don Guardian, defended the settlement, noting the assessment is twice the price that Straub is paying for Revel.

Revel representatives wrote that "such savings substantially benefit the debtors' estates as well as any successor in interest who acquires" it. Straub's attorney, Stuart Moskovitz, said he was not familiar enough with the terms to immediately comment on it.

Tax appeals have cost Atlantic City dearly, devastating municipal finances in recent years as the casinos successfully challenged their assessments by arguing that their gambling halls were worth less in an era of declining revenue and increasing competition in neighboring states.

Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.7 billion last year.

Four of the city's 12 casinos shut down last year, and three of the surviving ones are in bankruptcy.

Under a plan being considered in the state Legislature, the casinos would make payments in lieu of taxes for 15 years, in return for forgoing their right to file tax appeals. The proposal, made by State Senate President Stephen Sweeney and State Sen. James Whelan, a former Atlantic City mayor, is designed to give the casinos cost certainty for years in advance, while letting the city know it can count on a certain level of revenue that won't be challenged in tax court.

If that alternative payment plan is approved by the state, the settlement with the Revel should be a moot point after the first-quarter payment is made, Filiciello said.