ATLANTIC CITY - A city tax lien sale brought faltering Atlantic City some pre-Christmas cheer Thursday - a $22 million tax bill from bankrupt Trump Plaza and Taj Mahal will be paid - but also some coal: Nobody bid on a $32.5 million unpaid tax bill from Revel.
"I'm concerned," said the city's revenue director, Michael Stinson, after the four-hour sale, with a total of nearly $59 million in owed taxes on 1,000 properties, yielded at most half of that.
Stinson said the tax sale plus an imminent $40 million note sale should be enough to get the city over the immediate 2014 budgetary crisis.
"There are no issues about continuing operations," he said.
Stinson said the city was also counting on a series of bills working through the Legislature aimed at stabilizing Atlantic City's tax structure and redirecting casino development taxes to the city.
He said the city had hoped someone would pick up Revel's unpaid $32.5 million lien, but Tax Collector Theresa Mulvenna's calling of "Block 62, Lot 1" and "Block 62, Lot 2," and the $31 million and $1.5 million amounts owed, brought only snickers from the dozen or so people in the room, most bidding on much smaller tax liens.
Mulvenna said the city's final revenue tally from the sale of liens was still being calculated. "At this time we are waiting for payments to clear," she said.
The annual sale allows bidders - mostly investors, speculators, and hedge funds - to purchase tax liens on delinquent properties in the city.
The successful bidder pays the tax bill - which helps the city - and then will either be repaid by the property owner with interest or, after two years, can foreclose on the property.
The interest rate is set by the sale, with bidding starting at 18 percent and going down.
If nobody bids, the lien reverts to the city at 18 percent, and the city has the right to foreclose in six months.
Thursday, inside the City Council Chambers, the available liens ran the gamut of Atlantic City past and present: the bankrupt and intractable Revel, the Vision 2000 Community Development, Asbury United Methodist Church, the A.C. Tuna Club L.L.C., and the Allure Gentleman's Dinner Theater, whose $35,214.28 unpaid tax bill reverted to the city.
Even the Steel Pier is having issues with its taxes. One unpaid levy of $53,940 was bought with a 10.2 interest rate, another reverted to the city.
A city official said the city expects Steel Pier Associates - which has done extensive renovations and is planning an observation wheel - to repay the taxes and maintain the property.
Stinson said the city scrapped a planned $140 million bond sale in favor of the short-term $40 million note because of unfavorable market conditions stemming from the city's financial crisis. The difference, he said, would have gone to Borgata to pay off the amount owed from its successful tax appeal. (The terms of a settlement with Borgata state the timing of a bond sale as "subject to general market conditions.")
All of the liens on the Trump properties were claimed by a single bidder, attorney Michael Sklar, whose bid of "zero" interest left observers puzzled.
Sklar's firm, Levine Staller, has a claim against Trump Entertainment Resorts - that it is a secured creditor and has a $1.25 million lien related to tax appeal judgments.
Sklar declined to comment and it could not be determined whom he was representing.
As for the Revel, which continues to teeter between two precarious auction bids, Stinson said the city was in negotiations with Wells Fargo to purchase the lien. Wells Fargo is the chief lender to Revel, bankrolling the bankrupt casino property as it pursues a sale.
Gil Brooks, an attorney representing Wells Fargo, attended the tax sale but did not bid and declined to comment.
Stinson said the city was still hopeful that Wells Fargo would take hold of the lien through negotiation or that a new owner of Revel would pay the tax bill. "It's the law," he said. "They have to pay taxes. Seems to me they should pay their taxes."
Atlantic City's ordeal, in particular the massive casino tax appeal judgments that put the city deep in debt, has officials and the city on edge, Stinson said. "You wake up in the middle of the night," he said, "thinking of them."