Trump Entertainment Resorts Inc., the bankrupt casino operator that owns the Taj Mahal, has turned to state officials after the cash-strapped city rebuffed its effort to get $175 million in property tax abatements.
Trump Entertainment has asked Jon Hanson, chairman of the New Jersey Gaming, Sports and Entertainment Advisory Commission, to put together a package of state funds to keep the casino open, William Hardie, an adviser to the company, said at a bankruptcy court hearing yesterday. Trump Entertainment has said it may close its remaining casino next month without tax relief and labor concessions.
The request puts Christie, a Republican considering a run for president in 2016, in the position of having to back the tax breaks or see a prominent business close. Three years ago, Christie supported $261 million of incentives for Atlantic City’s Revel casino, which went bankrupt twice, closed on Sept. 2 and may reopen under new management.
Kevin Roberts, a spokesman for Christie, said he couldn’t comment on Trump Entertainment’s proposal without knowing the specifics. Revel, he said, never received taxpayer money because it didn’t turn a profit, a condition of its incentive.
‘Finite Dollars’ Hanson, founder and chairman of the Morristown, New Jersey, development firm Hampshire Cos., said Trump has inquired about subsidies and that there have been no negotiations. He said it’s possible a deal could be worked out on tax incentives.
“There are finite dollars available in Atlantic City, and most of those dollars are being geared toward attracting non-gaming facilities,” Hanson said in an interview today. “There’s no major pile of dollars sitting there waiting for people.”
The governor must weigh the importance of Atlantic City’s tourism industry against opposition to Trump Entertainment’s requests, voiced by some state lawmakers, including Democratic Senate President Stephen Sweeney, at a protest last week in Atlantic City.
“The Jersey shore is iconic,” said Israel Posner, executive director of the gaming and hospitality institute at Richard Stockton College of New Jersey. “This is a very political season with an election coming up in November and a governor who’s in the news.”
Casinos Close The state commission, which consists of seven members appointed by the governor, is charged with developing recommendations for Christie to address casino and entertainment related issues, according to a state website.
Trump Entertainment, founded by -- yet no longer run by -- Donald Trump, declared bankruptcy last month as gambling revenue in Atlantic City shrank. The company closed the Trump Plaza casino and said it may shutter the Taj Mahal next month.
U.S. Bankruptcy Judge Kevin Gross said yesterday he would rule Oct. 17 on whether the company can scrap its collective-bargaining agreement with workers.
In a plan submitted to the court last month, Trump Entertainment said entities controlled by Carl Icahn, its largest creditor, would invest $100 million in the company provided that the company get the concessions.
Credit Downgrade The company sought property tax relief of about $30 million a year over five years from local officials, and $25 million from the Casino Reinvestment Development Authority, a state-sanctioned development agency.
Atlantic City Mayor Don Guardian opposes lowering the tax assessments of Trump Entertainment’s casinos and plans to review valuations in 2016, according to his chief of staff, Chris Filiciello. Trump Entertainment is seeking to reduce the assessed value of the Taj Mahal to $300 million from $1 billion and the Plaza to $40 million from $248 million.
The city had its credit rating cut one level to BBB+ by Standard & Poor’s last month after four of 12 casinos closed this year, crushed by out-of-state gambling competition.
“The city can’t afford those requests,’ Filiciello said.
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