Mere hours ago, executives of Borgata Hotel Casino & Spa filed a lawsuit that aims at preventing Atlantic City from borrowing the sum of $43 million necessary for repayment of the loan the state has. Its due date is March 31st and apparently, officials are pressed for time.
According to the lawsuit, the borrowing plan, which has been approved by the Atlantic City Council in the beginning of the month, is not compatible with the ordinance that dates back from September 2014. According to it, the city is allowed to borrow no more than $140 million for giving tax refunds to the local properties.
For instance, Atlantic City owes more than $88 million to Borgata.
The lawsuit has been submitted mere days before the emergency team announces its recommendations about stabilizing the struggling economy of Atlantic City.
Governor Chris Christie appointed the team in January and it seems like he relies on its recommendations about improving the financial condition of the region. However, people with knowledge on the matter said that these recommendations will put the start of bitter disagreements between Atlantic City, the state of New Jersey and Borgata Hotel Casino & Spa, which takes pride in being the most prominent casino in the region given the current complicated situation and the casino closures.
The President of Borgata, Tom Ballance, commented on the matter and said that Borgata officials were not going to give up on defending their rights. Mr. Ballance went on to say that casino officials are willing to discuss the issues with city authorities and the members of the aforementioned emergency team. For that purpose, they contacted representatives of both institutions. However, the emergency manager said that he was unable to discuss the matter, unless a lawsuit is filed.
As already reported, the emergency team is supposed to finish its project by Monday but the date when its findings will be publicly announced has not been specified yet.Atlantic City officials were reluctant to answer any questions related to these issues.
Back in January, city officials announced that they were going to borrow the sum of $100 million in order to give Borgata the tax refund it is owed. However, things slightly changed when Kevin Lavin was appointed as an emergency manager.
It was not long before the Mayor of Atlantic City, Don Guardian, suggested Borgata to be paid a smaller amount than the owed $88.25 million instead.
As a matter of fact, the sum mentioned above is quite significant given the capital budget of the property for 2015. According to information released by Boyd Gaming Corp., Borgata’s parent company, this year’s capital budget totals the modest sum of $40 million.
