Could Atlantic City End Up Like Detroit?December 30, 2013 12:18 pm
The Atlantic Club Casino Hotel has been a permanent feature of the New Jersey gambling scene since the 1980’s, but the news that the casino will permanently shut down on January 13th has piled extra pressure on the beleaguered gambling resort’s already downward spiraling revenues.
Compounding the problem is that in addition to Atlantic City now being left with just 11 casinos, the resort will now also lose a key tax ratable at a time when its borrowing to pay refunds on casino property-tax appeals has already hit a huge $270 million.
Unfortunately for AC, when the city revalued its tax base in 2006-07, the resort’s real estate values and casino revenues were at their peak but have since almost halved, leaving casinos such as the Golden Nugget Atlantic City paying property taxes at the elevated 2006 levels. Meanwhile, the bankrupt Atlantic Club Casino was increasingly unable to meet its property taxes as revenue slowed and will soon close leaving 1,600 workers out of a job.
Highlighting the significant dangers facing the east coast gambling resort, Republican Mayor-elect Don Guardian believes AC could one day face the same fate as The city of Detroit, which in June this year filed the biggest municipal bankruptcy in US history of $20 billion. Commenting on the worrying situation, Guardian, explained:
“The problem is that [casino] income declined, as well as a certain. In a few years, we will be broke under the way the city is doing business, and the [casino tax] appeals is just one part of it. Detroit continued to bond until [it] couldn’t bond anymore. It increased taxes and lost population. Some of those same things are happening in Atlantic City, and we have to take steps to avert bankruptcy.”
In an attempt to stave off that harrowing scenario, Guardian, 60, said that over the next year or two he intends to have AC’s entire tax base re-evaluated so as to bring its assessed values in line with the current reduced market values. In addition, he said he would be looking to make some serious cuts to AC’s budget over the next three years.
“It’s similar to a tooth that you didn’t take care of the last 10 years. We need to face the fact that we need a root canal, and I’m the dentist. No one wants a root canal, but..you will be happy I saved the tooth.”