Today Atlantic City’s hoping to stay afloat with a $73 million bridge loan from the state. Under the terms of the deal, the city’s required to dissolve its Municipal Utilities Authority as collateral to cover the loan. They failed to do it and that could position the casino capital as a sitting duck for a state takeover. The Press of Atlantic City reporter Christian Hetrick has been working the story and spoke with NJTV News Anchor Mary Alice Williams.
Williams: Marty Small, the city council president, said failure to dissolve the MUA effectively violates the terms of the state’s loan, right?
Hetrick: That’s what he said. What’s got to be clear though is they still have until September to do this. Really the issue of what happened last night is you have to pass the ordinance on two readings. They don’t have two scheduled meetings before that deadline. They were really supposed to vote it for the first time last night and then finally adopt it at their Sept. 7 meeting. Now they’re kind of scrambling. They may have to have an emergency meeting, and more importantly they need to find a fifth vote to actually pass the thing. They’ve had this MUA on their agenda four times and have never approved it.
Williams: They’ve got these competing ordinances. One says they can’t re-vote on this for another six months, one says they can if they get a majority, right?
Hetrick: That’s correct, but again if they haven’t had a majority supporting the dissolving of the MUA it’s going to be difficult to get a majority to reintroduce this ordinance.
Williams: You’ve just talked to Mayor Don Guardian. What did he say about this?
Hetrick: He called the development terrible and kind of, as you phrased it, it sort of makes a state takeover seem more likely today because they may default on this loan if they don’t meet the conditions. It would require them to pay back whatever they’ve received thus far from the state immediately.
Williams: Wait, they have to come up with $73 million on Sept. 15?
Hetrick: Only what they’ve received up to that point. So if they recently withdrew $13 million, for example, from that. So it would be whatever they had received from the state thus far.
Williams: What’s the likelihood of their being able to do that?
Hetrick: To pass the ordinance to dissolve the MUA? I mean, I guess I would say they’ve tried doing this four times and they’ve failed four times so what’s the likelihood that they’re going to do it a fifth time and actually pass it? It didn’t seem likely, but you’ll probably see a lot of pressure on those four council members that said no last night.
Williams: Quickly, how much longer can the city survive without a state takeover?
Hetrick: Well, the bridge loan, if they meet the terms and get all the $73 million, it gets them to November — which is their deadline to submit the plan that the state must approve or reject.