Settlement Denied by Borgata Casino
The Borgata Casino of Atlantic City has denied any agreement within a settlement that was reached with the city on tax refunds.
Atlantic City has faced a great deal of adversity over the past few years. In 2014, four casinos shut down with another venue shutting down earlier their month. The city was facing a state takeover only to be able to create a fiscal recovery plan to avoid such a takeover. The recovery plan included settling on tax refunds with the Borgata Casino, agreeing to pay $103 million instead of $150 million owed to the venue. Yesterday, the Borgata denied any agreement with the city.
Borgata Says No
The Borgata Casino claims that no agreement has been made with the city. The Borgata Casino’s General Counsel and Vice President, Joe Corbo, stated yesterday that no agreement was made and the casino will be waiting until Atlantic City reaches a consensus with New Jersey to then continue negotiations.
In a statement by the casino, as published by Press Of Atlantic City, the Borgata had this to say:
Approval on Monday
The plan was just approved on Monday night by city officials with a vote of 5 to 3 to 1. Officials went to the state Department of Community Affairs the next day to submit their plan and the state has until the 1st of November to accept or choose to take over the finances of Atlantic City for a five year time frame. Atlantic City officials have plans to cut 100 additional full time workers as well as sell Bader Field in an attempt to make up for lost funds. Additional cost-cutting as well as revenue raising measures have been put in place.
If the plan is implemented, the budget of the city should drop to $207 million by the year 2021, based on the plan summary. The budget for 2015 was set at $262 million. The PFM Group helped the city come up with the plan and Michael Nadol of the group stated that the document is comprehensive and professionally, the group feels that the plan will work if adopted and embraced.
The main portion of the plan is to sell Bader Field. The property is a former airstrip that has 143 acres of land. The area would be sold for $110 million to the Municipal Utilities Authority. The proceeds along with $105 million in financing (low interest) would be used to pay the debt owed to casinos including the Borgata and MGM along with the state. The state is owed for deferred employee benefit costs. This would leave Atlantic City with $30 million in reserves.
The plan also stated that the city and Borgata would be able to settle for the $103 million amount for tax refunds which the city owes the gaming venue. However, the city actually owes $150 million before interest based on tax appeals that were successfully made by the venue. According to the Borgata, the settlement has not been completed and the gaming operator wants to make sure that the state will accept the plan before moving forward.