Gov. Chris Christie’s administration rejected a financial turnaround plan by Atlantic City, enabling it to move forward with a threatened takeover of the struggling seaside gambling resort’s assets and major decision-making power.
The state Department of Community Affairs on Tuesday rejected a five-year turnaround plan in which the city would lay off 100 workers, cut spending and sell its largest tract of vacant land to its water utility, with the money helping pay down its $500 million debt.
Commissioner Charles Richman said the plan didn’t bring enough stability to Atlantic City’s finances and relied on legally dubious asset transfers to raise most of the money with which it intends to pay down the debt.
“I would have much preferred to leave management of the city’s recovery in the hands of its municipal officials,” Richman wrote in his decision. “However, I am constrained by the plan the city has placed before me. The enormous problems confronting the city did not occur overnight. City leadership has had ample time to improve the city’s financial condition, yet has avoided doing so in any meaningful way. The plan is not likely to achieve financial stability for the city.”
City Council President Marty Small, a Democrat, called the decision “misinformed, misguided and biased.”
“The fix was in, and it will be dealt with,” he said. “This is far from over.”
Mayor Don Guardian, a Republican, as is Christie, has promised to appeal an adverse decision in court. He called on Christie to hold off on imposing a takeover to give the city a chance to address the state’s concerns, even as he warned, “We will fight this until we cannot fight any longer.”
Some of Richman’s criticisms of Atlantic City’s plan include that it underestimates debt service over the next five years by approximately $18 million; assumes it will receive $31 million more in redirected casino investment taxes than is likely; and overstates property tax revenues by $20.5 million.
Atlantic City officials said Wednesday that their battle with the state over the city’s proposed financial turnaround plan is still ongoing. At a news conference, Guardian called the state’s report “political” and “full of inaccuracies.”