Atlantic City Could Run Out of Money By the End of Month

Borgata, which is owed $170 million, says it won’t make its first real estate tax payment this year. As a result, Atlantic City could be out of cash on Feb. 24th.

Atlantic City’s government could be out of money by the end of the month.

The declaration by the city’s attorney came in response to the Borgata’s announcement that it would not pay its first-quarter real estate taxes.

Atlantic City owes the city $62.5 million after the Borgata successfully appealed its property taxes several years in a row. The government of Atlantic City missed a deadline in December for the $62.5 million payment, which is for 2009 and 2010. The city owes the Borgata an additional $88 million in tax refunds for 2011 through 2015.

The Borgata successfully appealed its property tax bills after the Atlantic City gambling market collapsed in the wake of the financial crisis of 2007-08 and the expansion of legal gambling in Pennsylvania and other states.

“We did not come to this decision lightly,” a Borgata spokesman told The Press of Atlantic City. “We have been tremendously patient, giving city officials every opportunity to pay the amounts we are owed, or to engage us in good-faith negotiations.” Atlantic County Superior Court Judge Julio Mendez ruled the city must pay the $62.5 million tax bill and gave the city and Borgata 45 days to negotiate.

The Borgata is the city’s largest taxpayer. City attorney George Frino says Atlantic City will be out of money on February 24th if the Borgata does not make its first-quarter tax payment.

After Gov. Chris Christie vetoed a bill that would create a PILOT (payment in lieu of taxes) for Atlantic City’s casinos, the state announced a “partnership” with the city that would see the state taking over more aspects of city government.

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