Revel Casino Receives Huge Property Tax Break

Florida developer Glenn Straub may not have received the $8 million price discount he requested for Atlantic City’s Revel casino, but the $95.4 million he did pay was still a huge reduction on the $2.4 billion it cost to build the huge gambling venue in the first place. Furthermore, the original property tax assessment for 2015 of $1.15 billion, which was then reduced to $625 million has now been further reduced to just $225 million, representing a huge tax break for Revel.
As a result, Revel’s quarterly tax payment which would have been almost $10 million, will now be reduced to less than $2 million, while its annual municipal tax rate is expected to be lowered from $39.52 million to $7.52 million.
Commenting on the enormous tax break settlement, a Revel casino statement said that “such savings substantially benefit the debtors’ estates as well as any successor in interest who acquires it.”
Just as real estate developer Glenn Straub successfully argued he shouldn’t have to pay taxes based upon a valuation more than its market value, so have other similar claims cost Atlantic City municipal coffers dearly in recent times. The state’s other casinos have successfully challenged property assessments by pointing out the venues are now worth less on account of increased competition from neighboring states, resulting in declining gambling revenues. Case in point, Atlantic City’s casino revenues has plummeted by almost 50% from the $5.2 billion which was generated in 2006 to just $2.74 billion in 2014.
Under the payment-in-lieu-of-taxes plan currently being considered in New Jersey’s state legislature, all AC casino property taxes including Revel will be determined by each property’s size, number of hotel rooms and gross gambling revenue. After all, as Atlantic City’s casino industry has shrunk, so too has it’s property-tax base, and according to a Moody’s Investors Service its $20.5 billion value in 2008, is expected to be worth a mere fraction at $6 billion in 2017.