ATLANTIC CITY — A Casino Reinvestment Development Authority subcommittee put off voting on the borders of the city’s special improvement district, following objections by Borgata Hotel Casino & Spa.
The borders place the casino squarely in the district, obligating it to pay about $860,000 per year in additional fees, or about 14 percent of the Special Improvement Division’s proposed $6 million budget for 2012.
The casino is fighting its inclusion last year in the expanded district, which the CRDA says was part of the legislation that created the Tourism District. The matter is currently before the Appellate Division of the New Jersey Judiciary. While there are three casinos in the Marina District, Borgata is the only one litigating the expanded district borders.
Borgata objected Tuesday at the meeting of the CRDA’s Special Improvement Division Committee, saying it does not use the SID’s security and cleaning services, instead paying about $1 million for staff to patrol and clean the property. It also objected to paying the assessment while the matter was still in the courts.
Furthermore, with the SID’s focus on the Boardwalk, Borgata contends the Marina District casino’s contributions would be effectively helping its Boardwalk-based competition.
“This just makes no sense and it has no benefit to us,” said Auggie Cipollini, Borgata’s senior vice president of operations.
“Isn’t that the kind of thinking that got Atlantic City into problems in the first place?” responded Howard Kyle, who chaired the committee meeting.
There were a number of reasons for the resort’s woes, Cipollini replied.
Kyle, who is also the chief of staff to Atlantic County Executive Dennis Levinson, argued that Borgata benefits from some of the programs, such as the Boardwalk Ambassadors, who work as all-purpose guides and concierges for visitors. Furthermore, subcommittee members said the casino was a primary beneficiary of the $330 million Atlantic City Expressway Connector that opened in 2001.
Other businesses, not based in the district and not paying the district’s assessment, also could receive similar benefits from the ambassadors, and the connector tunnel did not benefit only the Borgata, casino staff replied.
Cipollini also pointed out that Borgata is based on a closed landfill that it paid to remediate. Furthermore, Borgata has been the resort’s top taxpayer for years, paying about $46 million in municipal taxes per year.
The casino also anticipates paying about 20 percent of the $30 million for the Atlantic City Alliance to market the overall city, instead of individual properties.
“At some point, you have to say ‘enough is enough,’” said Jack Plackter, an attorney with Fox Rothschild who represented the casino at Tuesday’s meeting.
After a closed-door board meeting, Kyle said the subcommittee would review the transcript of the meeting and take additional testimony until May 10. Kyle said later that a decision could be made later this month.
CRDA staff said written comment could be sent to the CRDA headquarters at 15 S. Pennsylvania Ave., Atlantic City, NJ 08401, attention “SID.”
In November, Borgata appealed its inclusion in the district to the Appellate Division. In the filing, the casino said it received a special assessment from the SID on Sept. 27, 2011, for $859,708. Payment was due Oct. 10, with a public hearing scheduled Oct. 11.
The appeal said that was the first formal notice the casino had received about the assessment, the amount, or even the fact that the casino would be included in the district.
The casino paid, under protest, and objected to its inclusion in the district at the hearing. The CRDA “overruled and dismissed the Borgata’s objections,” the casino said, confirming the decision was final.
In its appeal, the casino said the CRDA exceeded its authority by changing the borders of the district by resolution, rather than by regulation. The Borgata also objected to what it said was the lack of proper notice or formulation of the assessment.
The casino also objected to paying unreasonable fees, for services it did not need or want, actions it called “arbitrary and capricious.” But the appeal filing also noted the Borgata was willing to discuss a settlement.
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