ATLANTIC CITY — Glenn Straub, the owner of the closed Revel Casino Hotel, is suing the state, which he says is making him pay a tax bill that is $3 million more than it should be.
Straub has asked a Superior Court judge to remove his property from the list of casinos that make set payments to Atlantic City in lieu of property taxes.
He says his property should be taxed as an empty building, not an operating casino, because it was closed by the time the legislation took effect last November.
The state Department of Community Affairs, which is overseeing a takeover of the city’s finances, did not return requests for comment
The casino payment in lieu of taxes, or PILOT, program requires casinos collectively pay $120 million this year instead of property taxes. The measure was intended to stabilize the city’s tax collection base, which was wildly fluctuating after a rash of costly casino tax appeals. Those appeals led to a massive budget deficit and the eventual state takeover, which is about to enter its second year.
Straub filed his lawsuit in Atlantic County Superior Court on Oct. 14. In court filings, he claims that since he never owned the property when it was a casino, the property should be exempt from the program.
Revel closed in September 2014 after operating for two years. Straub, who bought the property for $82 million at a bankruptcy auction in August 2015, has yet to reopen it.
“The PILOT Act penalizes it by requiring it to pay based on the fact that at one time the property was licensed to operate as a casino, but does not generate the level of revenue as casino properties because no casino operates there and, in fact, never did operate there in the entire ownership period of the plaintiff,” according to the complaint.
Under the PILOT, Straub owes more than $8.3 million in taxes despite not having gaming at the property. Straub would be required to pay $5.1 million if the property was taxed based on its value, according to the suit.
“It’s crazy,” Straub said of the PILOT. “It’s not a casino, because the state says we need a license. They are penalizing us millions and millions of dollars.”
This is not the first time Straub has filed a lawsuit against a state agency. Straub also appealed a state Casino Control Commission ruling that requires him to get some type of casino license before he can reopen the property.
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“The whole PILOT is like putting a Band-Aid over a 7-inch-deep cut,” Straub said.
Straub is now the third entity to file suit against the state over the program.
In May, Liberty and Prosperity, a constitutional advocacy group, sued the state to block the law. In September, Atlantic County filed suit against the plan, claiming it was unconstitutional. The county claims that not receiving a 13.5 percent share of PILOT revenues will lead to tax increases.
Earlier this year, Judge Julio Mendez combined the county and Liberty and Prosperity suits into one court hearing. A hearing on motions in the case is scheduled for 9:30 a.m. Nov. 30.
“The state knows in their heart of hearts that they are fighting a losing battle,” said Dennis Levinson, county executive. “The state is the only one that is pushing it.”