New $4.8M tax appeal settlement related to Hard Rock purchase

Atlantic City and Atlantic County have a surprise, $4.8 million casino property-tax appeal settlement to pay, just a year after the state announced all such appeals were settled.

The state settled this latest tax court case with an agreement that Atlantic City will pay $1.2 million a year for four years to the owners of Hard Rock Hotel & Casino Atlantic City, starting next year, according to Lisa M. Ryan, spokeswoman for the state Department of Community Affairs.

Atlantic County will be responsible for 8 percent of the total, she said.

“We were told this was totally, completely settled,” said County Executive Dennis Levinson. “They can do whatever they want right now, as long as the cost is not passed along to county taxpayers.”

In August 2017, the state announced it had settled all casino tax appeals, totaling $80 million, for which the city bonded.

“Because of the timing of Hard Rock’s purchase of the property and the work that needed to be done to get the casino into the PILOT (payment in lieu of taxes agreement for casinos), the 2017 appeal was not able to be included in the $80 million bond ordinance the city approved in August 2017 to fund other property-tax appeals,” Ryan said.

The settlements were to cover appeals from 2014 to 2017 for various casino properties, but the settlements for Trump Taj Mahal Casino Resort only went through 2016, the year Taj closed.

The appeal that has yet to be paid covers the tax year 2017 and was filed by former owner Carl Icahn when the property was still the Taj Mahal, said Ryan. Hard Rock bought the Taj Mahal from Icahn in early 2017.

“Because a court judgment has not yet been entered on the agreement, Atlantic County’s budget for tax year 2019 will not be affected,” Ryan stated. “Moving forward, the county share of the refund will be at 8 percent.”

Levinson said the county settled its lawsuit in 2018 against the state over what percentage of the casino PILOT it would accept based on the state’s announcement that tax appeals related to casinos were settled.

“It was a settlement, it was signed, sealed and delivered in Superior Court,” said Levinson. “Of course it would have made us negotiate differently” had the county known there was still a tax appeal to be settled.

The settlement gave the county 13.5 percent of PILOT payments for most of the 10-year agreement, but the county agreed to take less than that for 2016 and 2017 and for some of the final years if it continues that long.

After this, Ryan said there are no remaining tax appeal issues for any current casinos or properties that used to be casinos.