Resorts Atlantic City will likely save more than $1 million on its taxes this year, following a settlement it negotiated with Atlantic City officials last month.
Over the next two years the casino’s assessed value will fall by one-third, from $165 million in 2013 to $120 million this year, and then to $110 million next year, according to the settlement released on Monday following a public records request.
Under the city’s 2013’s tax rates, the most current, that value reduction would translate to a $1.1 million saving between last year and this year, with an additional $254,000 savings next year. Resorts paid nearly $4.2 million in combined city, school and county property taxes in 2013.
The casino will not receive a refund for any overpayments, according to the four-page agreement, and the casino also agreed to shelve its 2014 tax appeal.
The agreement also said that Resorts was in the process of developing a condominium complex at its Margaritaville development, and that the “Margaritaville Development” would not impact its 2014 or 2015 tax assessments. Resorts spokeswoman Courtney Birmingham did not respond to a request for comment.
The city and Resorts had previously agreed to set the casino’s value at $165 million for 2011, 2012 and 2013. Since that initial agreement, however, Atlantic City’s casino industry’s downturn has continued as customers continue to migrate to Pennsylvania and elsewhere.
Resorts Atlantic City in 2011 reported $13.9 million in losses on $205.7 million in total revenue, according to state Division of Gaming Enforcement figures. Those figures in 2013 were $12.2 million in losses on $176.5 million revenue.
Atlantic City Mayor Don Guardian was unavailable on Monday. Michael P. Stinson, the city’s director of Revenue and Finance, said the alternative to the settlement was continuing to fight with the casino, spending legal fees before getting a value from a Tax Court judge.
Stinson said that based on previous court decisions, a Tax Court decision would probably result in the Atlantic City having to repay overpaid taxes.
The settlement is the latest to be made between the city and its casinos. Previous settlements have sharply reduced the city’s overall property value, while saddling it with more than $320 million in obligations for overpaid taxes.
Atlantic City most recently settled with Borgata Hotel Casino and Spa this month, agreeing to pay $88 million in refunds on taxes paid between 2011 and 2013, issue a credit against current-year taxes and agreeing in principal to a lower assessment next year.
The last outstanding settlement is with Caesars Atlantic City and Harrah's Resort. Among other issues, Caesars challenged the city's $75 million assessment of The Pier at Caesars earlier this year, which results in $2.9 million in taxes.
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