Atlantic City is selling up to $140 million in municipal bonds to cover payments on property tax appeals owed due to its overvalued casinos.
Reuters reported that the city borrowed as much as $205.7 million since 2010 when it began issuing tax appeal bonds annually, with the biggest round of borrowing expected to take place this year. The new bonds will be supported by a state program that gives bondholders the first shot at state aid.
Atlantic City is now in damage control mode, with mayor Don Guardian laying out plans to expand the city's economy beyond casinos to beat the downturn as competition intensifies from neighboring states. The city could see a shift to focus more on meetings and events, as well as non-gambling entertainment.
According to Philly.com, the planned September closure of the Revel Casino Hotel and the Trump Plaza in Atlantic City is going to wipe an expected $2 billion from property-tax values in the city in 2015. Additionally, the city could see its property tax values fall as low as 7.5 billion in 2017, down from $20 billion in 2009.
The city is also being forced to trim $40 million from its budget for 2015, recently passing a 2014 budget off $261.4 million. Part of these savings will come from eliminating departments, which have yet to be named, meaning as many as 300 of Atlantic City's 1,267 full-time employees could be out of work next year.
Atlantic City is preparing for the influx of new job applicants in the wake of the upcoming casino closures, funded by a $400,000 grant from the Casino Reinvestment Development Authority, according to the Asbury Park Press. The effort will help re-train 1,200 workers per year, and mayor Guardian expects 20 to 30 percent of those laid off to continue working in the casino industry in other states. An additional 10 percent are nearing retirement age.
Atlantic City's upcoming Bass Pro Shops outlet is expected to create 1,300 new private-sector jobs, while eight other operating casinos could still be outlets for laid-off workers. Tourism and economic development officials expect these remaining casinos to be stronger financially than those that failed.
“I can’t stress enough that Atlantic City is open for business,” Liza Cartmell, president of the Atlantic City Alliance, told the Asbury Park Press.