ATLANTIC CITY — You might call it just a typical week in the state of New Jersey's ongoing assertion of its power in Atlantic City.

On Tuesday, the state's Atlantic City overseer expressed outrage over $3,000 bonuses approved by the city's water authority board to be given to themselves and said he would use his power to veto them.

But over at the New Jersey Casino Reinvestment Development Authority,  a state agency that already controls much of Atlantic City, nobody on the board was blinking as its outgoing executive director was awarded a $225,000 severance and replaced by a lawyer whose resume includes both Gov. Christie's office and a high-powered law firm.

John Palmieri, outgoing director of the CRDA, the powerful state authority that has controlled the investment of nearly $2 billion from a 1.25 percent tax on gross casino revenue since 1984, said the severance was part of his contract, signed in 2011, since his departure was not voluntary. (Though he described it as mutual, and about six months in the planning).

His replacement is Chris Howard, the deputy executive director appointed to that post in August.

Both the severance and the replacement are raising eyebrows.

Howard, a 2010 graduate of Rutgers-Camden Law School, comes straight from both the governor's office and a powerful politically connected law firm.

In 2013, Howard was an associate at the powerful law firm of Parker McCay, home to lobbyist Philip Norcross, brother of South Jersey political broker George Norcross.

From there, Howard went directly to the office of Gov. Christie, according to his LinkedIn profile, spending about two-and-a-half years first as assistant counsel, then associate counsel, in the Authorities Unit. He was then sent to Atlantic City to be Palmieri's deputy, now replacement.

Howard will earn $175,000 as executive director, $50,000 less than Palmieri's salary, in a two-year contract, said CRDA board chairman Robert Mulcahy. Palmieri had served in a similar post in Boston.

Philip Norcross, managing shareholder and chief executive officer of Parker McCay, has been active in Atlantic City as a lobbyist for New Jersey American Water, one of the private water companies angling for control of Atlantic City's valuable water authority. New Jersey American Water recently said it would stop buying water from the A.C. Municipal Utilities Authority, which prompted a 10 percent rate hike.

Both the severance being paid to Palmieri and the pedigree of his replacement raised concerns in Atlantic City, which is already edgy about the state's takeover of City Hall, in the guise of Jeffrey S. Chiesa, another attorney with ties to Gov. Christie. Chiesa is an attorney at the former law firm of David Samson, a close ally of Christie who pleaded guilty to bribery in connection with a United Airlines flight to his summer home in South Carolina.

 "It appears we are willing to cost taxpayers hundreds of thousands of dollars so that political insiders and cronies get jobs off the backs of working families,” said Assemblyman Chris Brown (R., Atlantic), who has been a harsh critic of Christie's moves in Atlantic City.
On Facebook, Atlantic City businessman John Exadaktilos, owner of the Ducktown Tavern, expressed frustration at the lucrative payout to the departing Palmieri. "No one deserves a going away gift," he wrote. "Maybe a pen. It's a crime the small business person contributes to the 3 % AC luxury tax and get little in return."
That luxury tax goes to the state, another sore point with local officials now under a state takeover because of budget problems. Atlantic City's ratable base has dropped from $20 billion in 2010 to about $6 billion.

Chiesa, the state's designated overseer, has said he will be paid at an hourly rate, but the state has yet to release what that rate is and what the parameters of his retention agreement will be. Prior overseers of Atlantic City, called emergency managers, cost taxpayers about $2 million in salary and consultants.

Christie's office did not respond to a request for comment on Palmieri's severance. Christie has veto power over the minutes of CRDA meetings.

Brown, the Republican assemblyman, said he had asked the governor's office to veto the severence, but had not received an answer.

The CRDA itself is slated to receive about $18 to $20 million less in casino reinvestment funds this year, the result of legislation diverting that levy to the coffers of Atlantic City itself.

A similar, but private, development agency, ACDevCo, was awarded the lucrative contract to build Stockton University's city campus and South Jersey Industry's corporate headquarters in Atlantic City.

A no-bid contract was awarded to builder Joe Jingoli, who has also expressed interest in redeveloping the South Inlet area near the former Revel Casino, an area the CRDA itself has spent about $9 million purchasing land.

At one point last year, Jingoli was named redeveloper of the South Inlet area by the Atlantic City Council, prompting speculation he would be part of an effort to get control of the Revel property from owner Glenn Straub, but that action was later rescinded by the council. Jingoli was also part owner in Revel's energy plant that was ultimately sold to Straub for $30 million.

ACDevCo, an offshoot of New Brunswick Development Corporation, has ties to Jon Hanson, a Christie adviser who produced two reports on Atlantic City that advocated for a state takeover.