Atlantic City’s Revel Casino is that much closer to ending its feud with ACR Energy. The fight was over millions of dollars in unpaid electric bills. They’ve asked a federal bankruptcy court judge to approve a $5 million settlement with both ACR and the state of New Jersey. If he does, Revel’s Chapter 11 bankruptcy protection can move forward.
Owners of another closed casino — Trump Plaza — have filed a deed restriction that would keep it shut for at least 10 years, the goal being to avoid taxes. Gov. Chris Christie may soon sign into law a key provision of the Atlantic City rescue plan called the Payment In Lieu of Taxes — or PILOT — program. Under it Trump Plaza attorneys assert that the owners could be required to make mandatory tax payments for the months that it was open in 2014, even if it generated no revenue. Caesars Entertainment already filed a similar deed restriction to dodge the PILOT program. State Senator and former Atlantic City Mayor Jim Whelan spoke with NJTV News Anchor Mary Alice Williams about the benefits of the PILOT program to Atlantic City’s economy.
Whelan said it wasn’t much of a surprise that Trump Plaza filed a deed restriction today on operating as a casino for 10 years. He says the issue really is a mid-Atlantic/East Coast problem more than solely an Atlantic City issue with the proliferation of gambling in the Northeast.
“The proliferation of gambling in Maryland, Delaware, Pennsylvania, New York, Connecticut — you name it — has shrunk our market and the reality is that whether it’s Trump Plaza or Showboat or Claridge or Atlantic Club, they’re not coming back as casinos. The market will just not support beyond where we are right now with the exception of Revel — good news that they may have a settlement to their issue,” he said.
If the PILOT bill is passed, Trump Plaza would have to pay taxes for the eight months that it was open in 2014, according to Whelan.
“In the calculations that were done with the bill, it was not anticipated that they [Trump Plaza] would be paying taxes. So again this is not really a surprise. It makes sense from their perspective and it’s something that wasn’t anticipated when we looked at it,” Whelan said. “What the PILOT does is set a floor of $120 million and Trump Plaza was not really part of those calculations.”
Despite Showboat getting out of PILOT responsibilities, Whelan says it will not hurt expected revenues for Atlantic City.
“The real assets of the PILOT is that $120 million is going to be predictable going forward, so it’s a floor below which the casinos won’t go. We’ve been in a downward spiral now so it’s a fact that Showboat is out. The fact that Trump Plaza will be out does not change that number at $120 million, so that predictability was important for both the casinos and for the city itself,” he said.
Whelan says the reason they put so much money into trying to stabilize taxes in Atlantic City is because without it, there’s not much likelihood that Atlantic City will see any investment.
“Whether it’s somebody who wants to buy a home and live there, or somebody who wants to invest in a small business or someone who wants to re-purpose the existing buildings,” he said. “We have Atlantic Club, Showboat, Trump Plaza, vacant buildings right now. Let’s get those re-purposed either as non-casino hotels or condos or some other use that will provide taxes and jobs and so on, as opposed to sitting there empty which is what’s going on now. You can’t sustain it without the PILOT that would stabilize taxes, again not only for the casinos but for the rest of us. I still live in Atlantic City, so for the rest of us who live and pay taxes in Atlantic City.”