ATLANTIC CITY — A state-appointed city overseer has settled the resort’s remaining casino tax appeals, including several with billionaire Carl Icahn.
The settlement covers various tax appeals from 2014 to 2017. It includes Icahn’s properties, as well as Caesars Atlantic City, Bally’s Atlantic City, Harrah’s Resort and Golden Nugget Atlantic City, state officials said Wednesday.
While the state did not reveal the exact amount of the settlement, officials said an $80 million bond introduced by City Council last month will be used to fund the repayments.
“The city was overwhelmed by millions of dollars of crushing casino tax appeal debt that they hadn’t unraveled when we arrived last fall,” said former U.S. Sen. Jeffrey S. Chiesa, the state’s designee leading the financial-recovery effort for Atlantic City. “We made it a priority from day one to reach settlement agreements with casinos that are favorable to the city.”
Icahn owned the closed Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, as well as Tropicana Atlantic City. The agreement settles tax appeals for Tropicana from 2015 and 2016, and Taj for 2014 through 2016 and for Trump Plaza from 2014 through 2017.
Those successful appeals all led to the city having to repay the properties and in some cases, casinos withholding tax payments.
“When everyone finally works together for the best interest of Atlantic City’s taxpayers and residents, great things can happen,” Mayor Don Guardian said. “Today’s announcement is more good news for Atlantic City’s taxpayers that we have been working toward since 2014, including the 5 percent tax decrease in the municipal tax rate this year and the over 11.4 percent decrease in overall property-tax bills.”
In March, a group of investors including Hard Rock International and the Jingoli and Morris families purchased the Taj Mahal from Icahn for $50 million. The group plans to rebrand the property into the Hard Rock Hotel & Casino Atlantic City and open it next summer.
“This is great news for the city,” said Marty Small, council president. “These are issues that have been nagging the city for years. With the PILOT coming in, we will not be seeing these type of appeals.”
Under a payment in lieu of taxes agreement, casinos will pay a total of $120 million a year. As part of the agreement, casino properties can no longer appeal their property taxes.
This is the second multi-million dollar tax appeal the state has settled since Chiesa was appointed. In February, state overseers reached a $72 million tax settlement with Borgata Hotel Casino & Spa. The city owed Borgata $165 million after successful property-tax appeals by the casino. The settlement saved the city $93 million, according to the state.
“Because of the agreements announced today, casino property tax appeals no longer threaten the City’s financial future,” Gov. Chris Christie said. “City residents can breathe easier knowing the state put the city in a much better position to preserve public services as it pays down the tax refunds it owes to casinos.”