New Jersey lawmakers who supported state tax breaks for Revel remain advocates of the measure, even though questions have been raised about whether the megaresort overstated its staffing projections when it applied for the incentives.
The Office of Legislative Services recently questioned the Economic Development Agency on the accuracy of estimates submitted by projects seeking financial assistance. It said Revel promised to hire 5,500 employees when it applied for an Economic Redevelopment and Growth grant, but as of March it employed only 2,415 full-time employees.
The resort, which opened a year ago and now is in U.S. Bankruptcy Court seeking approval to wipe out 80 percent of its debt and give creditors owed $1 billion an equity stake in the company, also announced this month it was trimming its overall staff by about 2.5 percent.
But even if Revel ends up hiring fewer employees than it promised, the project has benefited the city and the workers it has been able to hire, said state Sen. Raymond Lesniak, D-Union. He helped sponsor legislation creating the tax break program.
Without the promise of tax incentives worth $261 million over 20 years, Revel would have languished half-completed last year and never would have qualified for the financing it needed to finish construction, he said.
"You know who is going to suck wind? The private investors," Lesniak said. "They are the ones who are going to lose out. They made it a gamble. The city won. The construction workers won. ... The people who will continue to be working there won."
Revel's tax incentives account for nearly 60 percent of the state ERG grants issued as of February, according to the legislative service office. Under the agreement with the state, Revel taxes were projected about $14 million and the state was to have returned to Revel $600,000 at this point.
But none of that has happened because Revel hasn't submitted the necessary post-construction documentation showing it complied with required standards, such as green building codes, EDA Chief Executive Officer Michele Brown told the Assembly Budget Committee on Tuesday.
"No funds have been paid to Revel by the state," she said. "The state is under no obligation and EDA makes no recommendation."
At the same time, agency officials said they do not know the financial impact of the casino's planned bankruptcy proceedings on the state, particularly whether Revel's restructuring will dilute the state's interest in the megaresort. As part of the ERG program, the state was to have received a 20 percent cut of the profits from the original owners. Given the restructuring, net income now may be subject to a new formula, the Office of Legislative Services said.
Brown told the Assembly committee she believed a restructured Revel may benefit the state because it will reduce the number of loans and put more equity into the project.
"I do not believe the Revel bankruptcy will have a material effect on the state's position in the ERG," she said.
Assemblyman Al Coutinho, D-Essex, who was at the committee hearing and also heads the Commerce and Economic Development Committee, said what's most important is that no taxpayer funds have been issued to the project and even if Revel submits the necessary documentation to qualify for tax incentives, the payment will be tied to Revel's ability to make money.
"If they don't generate enough taxes, they won't get their number," he said."Performance-based incentives make sense."
Jon Whiten is deputy director of New Jersey Policy Perspective, a group that in the past has been critical of the decision to award the largest such grant to a casino project. He said had Revel not filed for bankruptcy and was instead prospering, there may be more attention paid to the tax incentives. But for now, lawmakers are content watching from a distance.
"They just want to make sure (Revel) doesn't completely shut down and isn't this huge black eye for Atlantic City and New Jersey," he said. "At this point, everyone wants it to survive."
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