It seems the Borgata Hotel Casino & Spa tax refund saga is nearing its end. Atlantic City officials have been repeatedly pressed to take a final stance on the matter and eventually provide an adequate compensation to the casino.
Although the refunds were due in December, Borgata is yet to receive a payment, which made its attorneys schedule a court appearance. They are going to appear in a Midtown courtroom tomorrow and demand the judge to rule out in their favour.
Borgata is known as the biggest taxpayer in Atlantic City and it has already been notified about the final stance of the New Jersey Tax Court. Back in December, Borgata made yet another attempt to accelerate the refund procedure by filing a Superior Court lawsuit but achieved sporadic success.
Those who keep themselves informed about the matter, know that Borgata entered a legal battle five years ago. In 2013, the assessments were reduced to $880 million and $870 million and despite the appeal the casino filed, the final decision remained unchanged.
In addition, a settlement agreement, covering the period 2011-2015, says that Atlantic City owes Borgata approximately $88 million in refunds, excluding interest. The settlement had to be paid by the end of 2014, but the city missed the given deadline. This resulted in litigation conducted by Borgata with the aim of obtaining judgements for the aforementioned period.
It is apparent that Atlantic City owes Borgata a huge amount of money and paying off the debt could be a huge milestone in resolving the financial issues that have befallen the city.
For the time being, Atlantic City does its best to prevent bankruptcy and deal with the financial hurdles outside the Bankruptcy Court. Having said that, the question about how Borgata is to be compensated remains unsolved.
Taking out a loan seems the most reasonable solution but given the complicated financial situation of Atlantic City, borrowing money would be an unwise and pricey decision.
The Atlantic County Improvement Authority is said to be able to borrow the necessary funds provided that the agreement is backed by a guarantee from the county.
For the time being, such an agreement seems the only solution to the poor credit rating of the struggling city. However, such a strategy can be effective only if it is included in a sweeping plan, aimed at dealing with the structural budget deficit.
The other alternative that might be proposed is raising taxes but the latter needs the approval of a Superior Court Judge. There is another side of the coin, though. The tax increase would result in a lot of disagreements between the business owners and basically, city officials are not to be given the “practical ability” to implement such kind of amendments.
