A.C. emergency manager's concerns weigh on rescue legislation

ATLANTIC CITY - Mayor Don Guardian said Tuesday that Gov. Christie may be weighing two objections from the city's emergency manager to the languishing legislation to rescue Atlantic City's finances, including whether casinos should be paying the city at a higher level for a longer period.

His comments came as officials tried to figure out why Christie notably left untouched the package of bills addressing Atlantic City's crisis, which has been sitting on his desk since June, despite taking action on dozens of other bills Monday.

Guardian said emergency manager Kevin Lavin, appointed by Christie to oversee city finances and debt restructuring, has questioned why a $30 million annual payment from casinos that now funds a marketing group would be diverted to the city's budget for just the first two of the 15 years of payment in lieu of taxes (PILOT) by the casinos provided for in the legislation.

The $30 million pot, which previously went to fund racetracks, would revert to the casinos after those two years without further legislation.

Guardian said Lavin has also questioned the length of the PILOT term, and suggested it should be shorter and renewable to take into account prevailing market conditions.

"He has shared with the governor some changes he'd like to see in the PILOT legislation," Guardian said Tuesday after a planning meeting for the city's two big beach concerts, Maroon 5 on Sunday and Rascal Flatts on Aug. 20.

The legislation is awaiting Christie's signature amid growing doubts about the bill from Atlantic County mayors, who worry about securing their share of the PILOT, and even Republican Assemblyman Chris Brown, who voted in favor of the PILOT but has since questioned its constitutionality.

The $30 million pot was redirected from racetracks in 2012 under a plan championed by Christie to fund the Atlantic City Alliance for five years.

The PILOT calls for a collective payment of $120 million by the city's eight remaining casinos, not including the $30 million, for 15 years.

Guardian said there has been discussion of other ways to keep the PILOT at a $150 million level - through giving the city a share of what the state collects from Atlantic City luxury and room taxes as well as casino parking fees, or by determining any PILOT changes based on the casinos' total gross revenue as opposed to gross gaming revenue, as the legislation now states.

A spokesman for Lavin did not respond to an email for comment.

Despite ongoing debate about the future of the city's valuable water supply - controlled by a municipal utility authority - Guardian said he did not believe there was any link between Christie's signing the PILOT legislation and the city's water or other assets, including Bader Field, as some have speculated.

"We're not giving them the water," Guardian said. He has urged changes to the utility, including its commercial rates, that would generate additional revenue.

He added, however, "I'll give anybody Bader Field for $400 million, because that wipes out all our debt."

Christie signed a bill last year that made it easier for municipalities to privatize their water works, in some cases with Voorhees-based New Jersey American Water. Last month, the state Economic Development Authority approved $164 million in tax credits to encourage American Water to relocate to Camden.

New Jersey American is represented by lobbyist Philip Norcross and his Optimus Partners firm. Norcross is a brother of South Jersey power broker George E. Norcross III. Philip Norcross also is a lobbyist for the Casino Association of New Jersey, which last week again urged Christie to sign the PILOT legislation, warning of casino closures and job losses without it.

Eyebrows were raised after the state Department of Community Affairs circulated a draft of an agreement that would have given the state power to dispose of Atlantic City's assets to help mend the city's finances, but Guardian said the DCA has apologized and rescinded the draft.

The memorandum, first reported by the Atlantic City Press, threatened to withhold half of the $12 million in transitional aid if the city did not go along with proposed asset sales. But the city had to approve the agreement, which Guardian said it would not.

State Sen. Jim Whelan (D., Atlantic), a key sponsor of the PILOT legislation, again urged Christie to sign it to stabilize the city's tax base. With the legislature out of session, there is no firm deadline for the governor to take action.

Whelan noted that as with any PILOT agreement, the plan has to be agreed to by the business or institution, in this case, the casinos. Changing terms would undermine the current deal, he said.

"I'm for better deals," Whelan said Tuesday. "If you think you can get another $30 million a year out of the casinos for the next 15 years, I'm all for that. I don't think they're going to agree."

Both Whelan and Guardian noted that as soon as billionaire investor Carl Icahn takes control of the bankrupt Trump Taj Mahal, he will likely file a tax appeal, which could reduce the casino's assessed value to a quarter of the current $850 million, reducing a $27 million tax payment to less than $7 million - without the PILOT. Other casinos would follow, and could cut $50 million out of the city's budget, also undercutting the county's share.

Asked about Christie's plans regarding the legislation, Brian Murray, a spokesman for Christie, said in an email: "Nothing new. As usual, we won't be commenting on pending legislation until the governor's office has throughly reviewed it."