Borgata to Get Just Half of Back-Owed Tax Refund from New Jersey Coffers
Posted on: February 16, 2017, 09:38h.
Last updated on: February 16, 2017, 11:12h.
Atlantic City will pay its top-producing casino Borgata $72 million, less than half of the $165 million it owes the gaming operator in property tax refunds.
The agreement, according to the Press of Atlantic City, was negotiated by New Jersey state overseers, and lays to rest the long-running dispute between the city and its largest and most prosperous casino. The state has taken over the reins of the city in an attempt to stabilize its financial affairs.
The debt exists because, as the land gaming sector contracted following the recession of 2008, the city’s casinos successfully argued their property tax assessments were not commensurate with the amount of business they were then bringing in. Borgata, as the city’s biggest taxpayer, was also the highest over-payer, and was granted by the courts the right to withhold ongoing tax payments to the city.
Christie Ribs City Officials
“The settlement took both sides working closely together to find common ground,” said former US Senator Jeffrey Chiesa, who is in charge of the state takeover.
New Jersey Governor Chris Christie said Wednesday that the Borgata tax issue had been a top priority, and he couldn’t resist a dig at city officials for failing to deliver it themselves.
“The city administration, despite all the time and opportunity given to them, failed to accomplish this goal as they have with so many others,” Christie said. “This agreement saves $30 million more for taxpayers than what Atlantic City had anticipated settling for under its five-year plan.”
The city had proposed paying Borgata $103 million by borrowing through the state Municipal Qualified Bond Act, but this plan was rejected by the state.
End to Litigation
John McManus, executive vice president of MGM Resorts International, which owns the Borgata, said it was committed to being “a catalyst” in ensuring Atlantic City’s strong and vibrant future.
“With this agreement we are assured the relative certainty of payment, and the avoidance of additional cost and time related to further litigation,” McManus said of the settlement. “MGM Resorts and Borgata believe this was the right deal for all parties concerned and is in the best interests of MGM’s shareholders.”
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