Media report

New Jersey sells bonds to cover settlement deals with AC casinos

“Atlantic City is now getting excellent access to the bond market, which is amazing for a city that was contemplating bankruptcy before we stepped in to manage its finances,” state designee Jeffrey S. Chiesa said.
2017-09-25
Reading time 1:14 min
New Jersey has sold more than USD 68M in bonds to fund tax-appeal settlements with former and current Atlantic City casino properties.

According to Press of Atlantic City, the bonds were sold Wednesday under New Jersey’s Municipal Qualified Bond Act program with a 4.1 percent interest rate, expected to cover settlement deals with Bally’s Atlantic City, Caesars Atlantic City, Golden Nugget Atlantic City, Harrah’s Resort, Tropicana Atlantic City, the former Trump Taj Mahal Casino Resort and the former Trump Plaza Hotel and Casino.

“Atlantic City is now getting excellent access to the bond market, which is amazing for a city that was contemplating bankruptcy before we stepped in to manage its finances,” said former U.S. Sen. Jeffrey S. Chiesa, the state designee leading the financial recovery effort for Atlantic City.

The fact that the city obtained bond insurance and sold the bonds at a low-interest cost means it is well-positioned to responsibly pay down the tax refunds it owes to casinos while preserving critical public services, Chiesa said

The bonds will finance the remaining property-tax appeals filed by casino properties that the city faced and two noncasino tax appeals, totaling about $71.1 million, Press of Atlantic City reported. These include appeals for 2016 for Bally’s, Caesars, Golden Nugget and Harrah’s; for the years 2015 and 2016 for Tropicana; for the years 2014 to 2016 for the former Taj Mahal; and for the years 2014 to 2017 for the former Trump Plaza.

Since Chiesa was appointed by Governor Chris Christie back in November, the state settled two multimillion-dollar tax appeals.

In February, a $72 million tax settlement with Borgata Hotel Casino & Spa was reached. The city owed Borgata $165 million after successful property-tax appeals by the casino. The settlement saved the city $93 million, according to the state.
“The city is in a much better place and is back on the road to stability,” Chiesa said.

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