If Atlantic City can be likened to a boxer, he’s the punch drunk old-timer that has taken far too many hits and is probably a a jab away from getting knocked out.
New Jersey’s once famous gambling town received another haymaker to the jaw after Boyd Gaming Corp. and MGM Resorts International won a 61 percent reduction in property taxes on the Borgata Hotel and Casino, a cut that requires the city to pay back to the two companies.
The state’s top grossing casino was initially assessed a value of $2.26 billion back in 2010, but that was reduced to $870 million by the Tax Court of New Jersey late last week, giving an unexpected boost in profit for the casino owners while reducing the revenue for the city. As if Atlantic City needed any more of that sort.
All in all, Boyd and MGM Resorts, are owed $48.8 million for the 2009 and 2010 tax years, an amount calculated by A. Paul Genato, a tax attorney in Princeton, New Jersey, for Bloomberg.
“This is a devastating blow to Atlantic City,” Genato told the news agency in an e-mail.
Michael Stinson, Atlantic City’s director of revenue and taxation, struggled to even come to grips with the fact that Atlantic City’s already declining revenue will get another gut shot to the stomach.
“We certainly don’t have $50 million sitting in the bank,” Stinson told Bloomberg.
Not quite a massive understatement but definitely ranks right up there.
The city is expected to appeal the decision but it’s also preparing for some more bad news with no immediate decisions being made on the 2011 and 2012 tax assessments that Boyd and MGM have also challenged.
If the two companies also win that decision the way it just did with the 2009 and 2010 tax assessments, you’re looking at more money coming out of the city’s pockets – as if it had a lot to begin with.
