In Philadelphia, we know all about the dangers of overassessing or under-assessing property — and this week Atlantic City learns the hard way (as Philadelphia has) that it doesn’t typically end well. The Press of Atlantic City reports that a tax court has determined that the city of AC overassessed the Borgata Hotel & Casino in 2009 and 2010.
Press staff writer Lynda Cohen explains:
The ruling released Monday morning found that in 2009, the city assessed the casino’s properties at $2.26 billion, when the true value was less than 39 percent of that, or $880 million. In 2010, the assessment overage was more than 2½ times the actual value, the court found: $2.26 billion compared to $870 million.
The city of AC does not agree with the court's ruling -- in particular its approach. Solicitor Braun Littlefield characterized the judge's ruling as “fundamentally incorrect,” though he didn't disagree that the assessments were off:
“This case, although wrongly decided, recognizes the misguided policies of the prior administration along with national financial factors that have essentially caused the collapse of the New Jersey casino industry.”
The judge's ruling touched on Philadelphia's presence in the market:
By late 2009, a virtual wall of casinos — constructed or planned — arose along the Pennsylvania-New Jersey border from Bethlehem to South Philadelphia and continued into northern Delaware. These casinos, which offered slot machines, restaurants and other amenities attractive to the Borgata’s targeted customer base, skimmed clients from Atlantic City casino-hotels at a growing rate.
Auggie Cipollini, senior VP of operations, told Cohen that the Borgata has been paying a disproportionate $58 million annually in property taxes, "a significant portion of the city’s current $249 million budget."
Cohen calculates that, if the ruling stands the city will owe the Borgata "about $23.6 million for 2009, and $25.2 million for 2010." That doesn't include fees or 5 percent annual interest.
This decision will be appealed, which should relieve AC taxpayers -- they have already seen a jump in their property taxes.
And in other Jersey Shore news...
• Tropicana gets NJ's 5th Internet gambling permit
• Egg Harbor Township board alters plans to allow non-digital billboards
• In Ventnor Heights, relief lags for the less well-off
• Podcast: One Year Ago, Sandy Visited the Jersey Shore -- and Changed It Forever
• Sandy Victims: Insurance, Red Tape Are Horrendous