ATLANTIC CITY - The Atlantic City Special Improvement District, a 19-year-old organization that has worked to better the resort's business community, essentially dissolved itself Monday night, but not without reluctance, confusion and a lot of emotion.
After spending more than five hours in closed session, the SID's board of trustees voted Monday to transfer its assets and most of its liabilities to the Casino Reinvestment Development Authority as part of the state's plan to operate a Tourism District within the city limits.
The CRDA will officially fold the district into a new division of the state agency today as part of its new launch of the Tourism District, an effort to revitalize Atlantic City and reinvigorate the town's tourism industry.
"Most of the people on this board have been here for 19 years," said John Schultz, co-chair of the SID board. "We've been running this thing and it's not broken. So why fix it? How is the CRDA board going to do what this board does and do it effectively? I'm worried that they're going to make a mistake."
The SID is a nonprofit organization funded by a special assessment tax on businesses within the improvement district and carries out various activities to improve the city's business community, including street cleaning and promotional efforts. Until recently, Atlantic City Council held final authority over the district's budget.
The boundaries of the improvement district run on Atlantic Avenue from Maine Avenue to Albany Avenue, on Arctic Avenue from Ohio Avenue to Tennessee Avenue and on Ventnor Avenue from Kingston Avenue to Albany Avenue. The district also covers Pacific Avenue and the Boardwalk stretching from Albany Avenue to Connecticut Avenue.
Under the new structure, established by state legislation, the CRDA will assume the staff, equipment and programs of the SID. The new SID division will be accompanied by a SID committee made up of CRDA board members and an advisory council consisting of the current trustees and potentially others as the Special Improvement District expands to the boundaries of the Tourism District.
The board also voted to amend many of its bylaws, but that resolution requires another vote at the SID's next meeting, scheduled for Thursday, April 28.
Absorbing the SID is an integral part of the Tourism District plan. Atlantic City's businesses pay for the organization's operation. If a commercial property falls within the improvement district, they are required to pay a special assessment tax. That payment is set at $38 per $100,000 of assessed property value. The majority of those funds is generated through contributions from the city's 11 casinos, which will surely spike once the Revel casino project is completed next year.
Those funds will now go to the state, aiding the tough task of financing the new Tourism District. State legislators had hoped the district would take a portion of the expected savings stemming from recent casino regulatory changes, but state officials have discovered those changes won't yield nearly as much as first anticipated.
The SID's board of trustees spent more than five hours in closed session Monday night drafting technical changes to the resolutions members eventually approved. They took effect at midnight.
The assets turned over to the CRDA on Monday, including trucks and other equipment, are valued at about $1 million. Don Guardian, the SID's executive director, could not provide an exact number Monday night.
The authority also will take on many of the SID's liabilities, but not all. Paul Weiss, CRDA's chief counsel, said things like the district's 401(k) plan and its profit-sharing program cannot be assumed by the CRDA.
SID members on Monday expressed concern about a number of issues and powers they'd be losing, but also questioned whether they had any choice in the matter.
"Realistically, do we really have any options?" asked member Jeff Wilson, a local attorney. "If we say, ‘No, we're not going to vote on these,' you're just going to be forced to hire new employees."
Weiss affirmed that the board had little wiggle room.
"We don't see a lot of options to it," he said. "The best option is for the assets to go with the employees."
The CRDA will take over the staff of SID and no immediate changes to the payroll will occur until the authority performs a formal review of the employees, their duties and their salaries.
As for the board, CRDA officials tried to express the importance of the members as new advisers.
"Remaining as the advisory council brings a lot of opportunity," Susan Ney Thompson, the CRDA's interim executive director, told the board Monday. "There's a great benefit to leverage what resources you have with the resources we have. There's a unity and a mission that really could accomplish more."
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