In the latest installment of Muni Minute The Bond Buyer's 60-second video series that examines a top municipal market story that will impact the coming week we take a look at the $170 million in tax refunds Atlantic City owes the Borgata Hotel Casino & Spa and a crucial settlement meeting slated for July 7.
COHEN: With a November 3rd deadline looming for cash-strapped Atlantic City to draft a recovery plan to avoid a state takeover, one major obstacle is $170 million in tax refunds owed to the Borgata Casino. The city has a settlement meeting scheduled with Borgata representatives on Thursday, as the two sides try and iron out an agreement on the large debt. The Borgata has withheld property taxes this year after the city missed a $62 million payment owed for 2009 and 2010 refunds.
Mayor Donald Guardian has said that $20 million the city receives in annual Consolidated Municipal Property Tax Relief Aid could be used to help fund the Borgata debt going forward. Atlantic City received a $60 million bridge loan as part of a rescue package approved by New Jersey lawmakers after barely averting a default on its May debt service payments.
If state intervention occurs, New Jersey's local finance board would be empowered to alter the city's outstanding debt and municipal contracts for up to five years. I'm Andrew Cohen, and this has been your Muni Minute.