Atlantic City delays vote on sought-after water utility
ATLANTIC CITY - Future control of its drinking water continued to vex this beleaguered seaside city Wednesday, as it faced a looming state takeover and unrelenting outside interest in its water utility.
ATLANTIC CITY - Future control of its drinking water continued to vex this beleaguered seaside city Wednesday, as it faced a looming state takeover and unrelenting outside interest in its water utility.
The City Council was set to vote on bringing the water authority under direct city control in an effort to both monetize it and stave off private interests. But after a closed-door meeting, the council voted to delay any vote for 90 days.
Meanwhile, the current head of the Municipal Utility Authority, G. Bruce Ward, made a plea to keep the department an independent authority - but also said he planned to seek a "private partner" who would kick in $100 million to the authority.
Mayor Don Guardian said that unexpected proposal signaled to him that private and state interests, which have been circling the city's coveted water supply for months, were attacking on a new front.
"The MUA has given themselves the authority to sell to the same people in Trenton who wanted to buy it in the first place," Guardian said. "Whoever on the state level who's trying to take over the MUA is very smart. They bypass the city completely. For $100 million, I think they're buying the company."
Guardian has said the city can earn up to $4 million annually from the utility by streamlining operations if it becomes a city department, and preserve rates and quality for its residents. A state emergency manager agreed that the city should keep the water agency under its control.
The state's draft takeover bill has proposed giving the city one year to show it can monetize the water utility before opening it up to sale or lease.
City Council President Marty Small said he believed the one-year reprieve reflected the state's desire "to hope and pray the Flint crisis would die down and wouldn't be a discussion point." The economically distressed Michigan city is dealing with contaminated drinking water after switching its source under state control.
New Jersey has pressured Atlantic City to look at assets to solve its dire financial straits and help pay more than $170 million in tax-appeal refunds owed to the Borgata casino-hotel. Private water companies such as New Jersey American Water, represented by Philip Norcross, brother of South Jersey power broker George E. Norcross III, have expressed interest.
The authority has been criticized over patronage, but Ward and others noted it has employed local residents since its inception and should continue to be allowed to do so. Community activist Steve Young said it was created in part to be one of the only sources of jobs for black residents.
In other action at a busy meeting, held against the backdrop of state proposals that would take away much of the panel's decision-making power, the council named Philadelphia developer Bart Blatstein as "conditional redeveloper" of the Garden Pier, a storm-damaged yet picturesque pier near Blatstein's Showboat property. It is currently home to the city's art and historical museum.
The pier would be Blatstein's second in town. He took control of the former Pier at Caesars, renamed the Playground, which is being relaunched with a nightclub called WAV.
Minutes before, the council rescinded an agreement with the politically connected developer M&J at Melrose L.L.C., which had been named as redeveloper of the South Inlet area near and including the Revel property.
M&J is composed of Joseph Jingoli, a former partner in ACR Energy, which powered Revel, then brought it to its knees with a costly financing structure, and Jack Morris, the developer behind the Garden State Park redevelopment.
Both men have ties to Gov. Christie's Atlantic City point man, Jon Hanson. In a statement, company spokeswoman Liz Thomas said: "We are somewhat confused. We have an executed memorandum of understanding with the city . . . and we have dealt in good faith since then."
The Garden Pier resolution gives the city and Tower Investments, Blatstein's company, 90 days to execute a final deal for the company to redevelop the pier.
There was concern expressed over whether the council would be able to get maximum value for the pier at this low point in the city's fiscal travails, but Councilman William Marsh noted that there was precedent for the council to trade low: It gave Borgata its land for $1.
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