Atlantic City Mayor: This is our Pearl Harbor
Mayor Don Guardian said he was caught completely by surprise by a proposal by NJ Senate President Steve Sweeney to take over Atlantic City. "This was our Pearl Harbor," he said.
UPDATED with Sweeney comments:
The news overnight from Trenton left local leaders rattled in Atlantic City - yet another proposal by the state to storm the beaches of the casino resort that is already under two layers of state monitoring.
Mayor Don Guardian, a Republican, said on Atlantic City's WOND Radio Don Williams show Tuesday morning: "It caught us completely off guard. It was our Pearl Harbor here."
"We have been working with the state monitor since 2010, we've had the emergency manager since last year. I can tell you that we've been cooperating with everything they've asked us to do. So this comes as a complete shock."
Guardian said the only thing "some people in Trenton" wanted and didn't get was the MUA - the Municipal Utilities Authority that runs the water department. Guardian has proposed the city itself taking control of the authority.
The MUA has been a hotly sought after asset in Atlantic City and was last year the subject of meetings with private water companies, including New Jersey American Water, headquartered in Voorhees, and whose lobbyist is Philip Norcorss, brother of South Jersey power broker George Norcross. Philip Norcross was part of a meeting in July that discussed a state takeover of various assets.
"The only thing that some people in Trenton wanted was the MUA, to sell it," Guardian said. "But the emergency manager as well as city council and myself have agreed that made no sense."
UPDATE from Inquirer reporter Andrew Seidman: Tuesday afternoon in Trenton, Sweeney said he would introduce his takeover legislation on Tuesday.
"This is a very clear statement to Atlantic City," Sweeney told reporters. "Get your act together, knock off the BS, and start addressing what you need to address. The state is not going to come in and bail you out anymore. You need to fix this."
NEW: In a statement later Tuesday announcing his intention to introduce the legislation, Sweeney said: "If this action doesn't succeed, I will support a declaration of bankruptcy for Atlantic City."
The announcement stopped short of calling it a takeover, referring to the action as having the state "assume more management of Atlantic City's finances."
Earlier, Sweeney accused the local government of sitting on assets it should have sold and described its $262 million budget as an "outrageous" amount for a city of 40,000. By contrast, Sweeney said, Piscataway Township, Middlesex County, spends $55 million annually to serve about 60,000 people.
Asked about Guardian's contention that the takeover was about the authority that runs the water department, Sweeney said, "It's not about water. It's about making decisions to move the town forward. It's not being paralyzed because no one wants to change anything."
He added that there was a lot of "Atlantic City fatigue" in the Statehouse. Now that the Legislature is on track to ask voters to expand gaming to North Jersey -- and send what Sweeney said would be $3 billion in revenues back to Atlantic City -- the government must be managed more effectively, he said.
Sweeney said he'd "give them a chance" to get their finances in order before moving forward with the bill. But, he added, "This isn't nothing that they didn't know wasn't coming. Only someone who has their head buried in the sand could not imagine that something has to be done there."
Guardian also said any plans to sell Bader Field would be premature as it is worth about a tenth of what it was eight or nine years ago and it made more fiscal sense to hold on to it until its value can be regained.
Guardian said he was on his way to Trenton and noted that previous state involvement in the resort had not necessarily been productive. He noted that state-controlled assets like Boardwalk Hall and the Convention Center were losing millions more than when they were not in state hands.
Sweeney's plan was contained in a draft bill first circuated late Monday night in Trenton.
Also adopted in the last minute throes was a revised PILOT _ Payment in Lieu of Taxes _ bill aimed at stabilizing casino tax payments. The revised bill increases the amount casinos would pay in a series of payments over five years totalling $50 million, and sets a floor of $120 million annually for the total payments. But it also puts in a provision that any casino expansion would be subject to regular proprety tax payments - which State Sen. James Whelan said Tuesday in an interview represented a clear advantage to the bigger casinos over the smaller ones.
"That's a disincentive for the smaller casinos," Whelan said. "Who wrote that, Harrah's or Borgata?"
"It does benefit the bigger ones," continued Whelan, who voted against the revised bill in part he said because of the hasty, last minute way the changes were introduced to a bill that's been debated for over a year.
"Which has the better ability to pay, Resorts struggling to pay or Bogata which is rolling in cash. The big guys don't care, they're basically built out. If Resorts wants to add something, they'd have to pay full tax rate. Harrah's has its convention center. Resorts may go under, the big guys don't care, they'll just absorb the new business."
The bill also requires 13.5 percent of the PILOT to go to Atlantic County, which Whelan said was a windfall for the county at the expense of the city, according to the Associated Press.
The casinos have to agree to the PILOT. Whelan said he did not know if all the casinos were on board with the changes, though the legislators were told that the casinos as a whole were on board with the changes.
But if there was Atlantic City fatigue in Trenton, there was definitely Trenton takeover fatigue in Atlantic City.
After all, Christie's previous visits to Atlantic City were billed as takeovers as well, beginning in 2010 with a Boardwalk pronouncement that the state was taking over the Tourism District, an effort criticized as apartheid by then-Mayor Lorenzo Langford.
Next, Christie appointed an emergency manager, Kevin Lavin, who has kept a low profile, though some of his suggestions were incorporated Monday into the new version of the casino Payment in Lieu of Taxes bill that's been languishing for more than a year. Lavin is months overdue on issuing a report on the city's finances, and has been negotiating with Borgata parent company Boyd Gaming to work out a deal on the $150 million owed Borgata from tax appeals. The city already had a fiscal monitor in place when Lavin was hired, along with former Detroit emergency manager Kevyn Orr, who has since left his position.