ATLANTIC CITY, N.J. --Atlantic City officials vowed Wednesday that their battle with the state over the city's proposed financial turnaround plan is still ongoing even though Gov. Chris Christie's administration has rejected the proposal.
Speaking at a news conference in City Hall, Republican Mayor Don Guardian and other city leaders sharply criticized the state's decision, announced in a 75-page report issued Tuesday by state Department of Community Affairs Commissioner Charles Richman. They said the report was "based on pure politics" and was "full of inaccuracies."
They also repeatedly said that the state has failed to provide a plan of its own.
The state's rejection enables it to move forward with a threatened takeover of the struggling seaside gambling resort's assets and major decision-making power. The proposed takeover would give the state vast authority over Atlantic City's affairs, including the right to dissolve agencies, cancel decisions by local elected officials and sell off assets, including land and a water utility coveted by private operators.
Under the city's proposed five-year turnaround plan, it 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. 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.
Guardian said the city would hand-deliver its response to the DCA by Thursday afternoon, the original deadline for the city to submit its recovery plan. Atlantic City had offered its plan early.
City officials said they likely would take legal action if the state doesn't accept the latest submission.
"We're taking the opportunity, line by line through the 75 pages, to respond to each of their concerns," Guardian said. "We're going to name the inaccuracies they have in the report and provide the backup detail they weren't aware of."
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.
Richman also faulted the city for not including tax increases as part of its recovery plan and said the proposed $110 million sale of the city-owned Bader Field former airport property to the city's municipal utilities authority is "structurally flawed." That sale would've raised the largest share of money the city intended to use for debt reduction.
Atlantic City's financial situation has worsened as its casino industry continues to contract. Five of the city's 12 casinos have gone out of business since 2014.
In 2006, casino revenues were $5.2 billion; last year they fell to $2.56 billion. As the casinos' value decreased, they won numerous reductions in their tax assessments, making it impossible for the city to fund the level of spending it had when times were better.