Atlantic City officials are not on board with the state intervention plan pending in the New Jersey Legislature.
Mayor Donald Guardian joined city council members and other elected officials in lambasting the takeover plan during an early Monday afternoon press conference and called for a new financial assistance bill that would allow it to maintain "sovereignty."
The proposal introduced on Feb. 18 in the New Jersey Senate would empower the state to renegotiate Atlantic City's outstanding debt and municipal contracts for up to five years while also giving the state the ability to leverage city assets and make staff cuts.
Atlantic City would also have one year to find a way to monetize its water authority under the proposal, before the state steps in to use the assets to generate needed funds.
"We cannot stand here today and accept any bill with the broad, overreaching powers as the one presented to us last week contained," said Guardian.
"The civil rights of our citizens are being trampled on," the mayor said.
"We were all troubled by this draft bill," Marty Small, president of the Atlantic City Council, said during the press conference. "It takes our sovereign right to govern our own city away."
State Senate President Steve Sweeney, D-Gloucester, introduced the bill with Senators Kevin O'Toole, D-Wayne, and Paul Sarlo, D-Wood-Ridge in an effort to avoid an Atlantic City bankruptcy.
The Jersey Shore gambling hub is in danger of running out of cash by early April without a state rescue package, according to a Jan. 21 report from former emergency manager Kevin Lavin. The proposal came three weeks after Gov. Chris Christie and Sweeney joined Guardian to announce a new "partnership" that would avoid bankruptcy.
"The final piece of legislation that the State presented to us was far from a partnership," said Guardian. "It was worst. Some would even say fascist," he said.
"It will be a cold day in hell before we just stand by idly and just allow folks to run over the people of Atlantic City," said Atlantic County Freeholder Ernest Coursey. "I think we ought to work in partnership with the state of New Jersey and stop this hostile talk of a takeover."
Gov. Chris Christie rejected a financial relief package in January that would have enabled the city's eight remaining casinos to enter into a PILOT program for 15 years and aggregately pay $120 million annually in that period instead of a traditional property tax. A companion bill included with the intervention legislation shortens the PILOT period from 15 years to 10 and requires casinos make additional payments based on their share of total gaming revenue that would be used for paying down the city's more than $400 million in outstanding debt.
In addition to municipal bond debt, Atlantic City also the Borgata casino $170 million in tax appeals and missed a $62.5 million payment owed on Dec. 19. Atlantic County Court Judge Julio Mendez ordered a 45-day mediation period on Feb. 5 and Guardian said in his remarks Monday that if no resolution can be reached by then he will have no choice than to petition the state's Local Finance Board for a bankruptcy declaration.
"The sad irony is that we have a casino industry that wants to redirect their funds to the City of Atlantic City to help avoid all these doomsday scenarios," said Guardian. "There is a reasonable and practical solution out there, but that path has not been chosen by the state yet."