Mayor Don Guardian of Atlantic City tries to calm the masses and slow the failing city economy through tax cuts and spending.
Mayor Don Guardian, of Atlantic City, attempted to bring some form of calm his fellow citizens as well New Jersey residents by declaring 2015 “a year of healing.” With four out of the 12 casinos closing their doors and a resulting loss of 8000 jobs, Atlantic City was dealt a serious blow to their economy dependant on casinos, betting and online sports betting.
An additional casino was almost lost, but fortunately salvaged. Trump’s Taj Mahal was barely saved before Christmas thanks to a deal made with investor Carl Ichan. Trump Entertainment Resorts CEO Bob Griffin appealed to the billionaire investor to continue funding the casino through 2015. Ichan, who holds $286 million in debt on Taj Mahal, gave 3000 workers a Christmas gift of continued employment.
Another Casino to Possibly Close down
Mayor Guardian expects yet another casino to close in the future. Judging from his description, the next victim could be Bally’s Atlantic City. Their parent company Caesars Entertainment had already closed its Showboat Casino last August in order to curb the competition for its other Atlantic City casino.
• Atlantic City Mayor Guardian declares 2015 a “year of healing.”
• Atlantic City lost four casinos and almost a fifth in December.
• Mayor Guardian as collected on tax liens and received a loan from New Jersey Govt.
• Mayor Guardian also plans to cut spending by $40 million over three years.
With $24 billion in debt as of last October, Bally’s had discussion with its bank lenders to lighten the debt load and avoid bankruptcy protection. Some analysts believe Bally’s actions are intended to reorganize its finances outside of a courtroom in accordance to U.S gambling laws. Bally’s CEO Gary Loveman told the Las Vegas Review that the company had no intention of filing for bankruptcy.
Within the past several years, Caesars Entertainment has tried to do many things to shave it’s debt including dividing its casinos, businesses and properties among subsidiary companies. The company sold the Claridge Hotel tower and the Atlantic City Country Club to a private buyer. In addition to the Showboat casino, the Harrah’s Casino in Tunica, Mississippi was also shut down last June.
Tax and Spending Cuts Could Salvage City
Mayor Guardian’s first pledge as the first republican mayor in 23 years was a “root canal” the heavily indebted city. Two years ago, New Jersey made U.S. gambling news when it lost its spot to Pennsylvania as America’s second largest casino industry outside of Nevada. As a result, Atlantic City has suffered much pain in the dental chair and may experience more before it’s over.
Despite this, revenues from tax and spending cuts could provide some healing.
Atlantic City just sold a $32 million tax lien by Revel to Wells Fargo for $26 million and collected a $22 million tax lien on Trump Entertainment Resorts. The State of New Jersey also gave Atlantic City a $40 million loan at a 0.75% interest rate. The Philadelphia Inquirer reported Mayor Guardian as saying the loan will “be enough to allow Atlantic City to pay its workers, continue operations and send the country and school systems their share of tax revenue owed for 2014.”
The Mayor also mentioned such new developments for this year as a new Bass Pro Shop’s outlet store, a college campus converted from a old casino, a revamped Piers Shops at Caesars and a new convention center at Harrah’s. Guardian’s initial plan to cut city spending by $40 million in the next fours years has been reduced to three. Police and fire departments may experience layoffs. In addition, an entire department of city government may close.