Should Atlantic City File For Bankruptcy? Some Say Yes
The new team assigned to dig Atlantic City out of financial ruin says talk about bankruptcy is premature. But some observers say it may be the best possible move for the struggling town.
Plagued with a skyrocketing tax rate and plummeting casino revenues, Atlantic City was assigned an emergency management team in January by Gov. Chris Christie. Four of the city's casinos shut down in 2014; the Taj Mahal survived with the help of a last-minute cash infusion.
According to Roger Gros, publisher of Global Gaming Business Magazine, this is the team you'd want in place if bankruptcy was the route chosen.
"Do it as quickly as possible, get it over with and then move on," Gros said.
Kevyn Orr, a consultant for the emergency manager, helped Detroit through the bankruptcy process.
Gros suggested the team may be in place to take some of the heat off of Mayor Don Guardian, who took office last January.
"This is something that the mayor might not have been able to do because he would've been politically vulnerable. These guys don't have that problem," he said.
Senate President Steve Sweeney (D-West Deptford) on Jan. 29 told a group of New Jersey mayors the state cannot allow Atlantic City to go bankrupt. He threatened court action if the process gets to that point.
Since Christie's announcement of the new team, the city's bond rating took a hit.
Gros said the main priority, for anyone in charge, is getting the local tax rate stabilized.
"Nobody's going to come in and invest hundreds of millions of dollars in the city, unless they know that the tax rate that they're going to be facing is stable," he said. "If these guys can accomplish that and just stabilize the tax rate, not even lower it at this point, I think that would be a big accomplishment on their part."