ATLANTIC CITY — The cash-strapped city could owe another casino owner millions of dollars in property-tax refunds.
Billionaire investor Carl Icahn’s companies recently appealed this year’s assessments for the former Trump Plaza and Trump Taj Mahal casinos, according to complaints filed last month in state tax court.
Icahn now has open appeals on both properties for tax years 2014 through 2017. In addition, he has appealed Tropicana Atlantic City’s assessment for 2015 and 2016.
The complaints don’t say how much money Icahn is seeking from the city. But successful casino tax appeals over the years have been costly, helping put the city hundreds of millions of dollars in debt.
“Since we are currently in discussions, I don’t think it’s appropriate to comment,” Icahn said.
A spokesperson for the state Department of Community Affairs, which is overseeing a state takeover of the city, said negotiations are ongoing but declined to comment further.
“We’re in discussions with Mr. Icahn and his representatives right now about trying to resolve outstanding monetary issues regarding his casinos,” state overseer Jeffrey Chiesa said April 5.
State officials, led by Chiesa, reached a $72 million tax settlement with Borgata Hotel Casino & Spa in February. The city had owed that casino $165 million in tax refunds, according to the state.
Last week, Gov. Chris Christie said the state is willing to negotiate with Icahn “the same way we negotiated with the folks at Borgata.”
“But what everyone needs to understand is there’s not much money left here,” Christie said, referring to the city’s troubled finances.
A state law enacted last year let casinos make fixed, predictable payments in lieu of property taxes in exchange for no longer appealing their assessments. Casinos will collectively pay the city $120 million this year.
But that law exempts properties with deed restrictions barring gaming there, allowing Icahn to again appeal assessments for the Plaza and Taj Mahal.
State lawmakers introduced the first version of the so-called PILOT bill in late 2014, which would have prevented Tropicana from appealing its 2015 and 2016 assessments if it was enacted shortly after.
But the legislation stalled, became a political football and was twice vetoed by Christie. A final version wasn’t enacted until 2016 and didn’t take effect until 2017.
“The original PILOT bill was going to protect us (in 2015 and 2016),” Mayor Don Guardian said earlier this month. “Unfortunately, that didn’t happen.”
Last year, Icahn’s companies paid the city more than $32.7 million in property taxes for the Tropicana ($22.4 million), Taj Mahal ($8.7 million) and Trump Plaza ($1.5 million), according to the City Clerk’s Office.
All three properties have seen their assessments reduced since 2014, with the Taj and Plaza’s values dropping dramatically.
The city assessed Taj Mahal at $812 million in 2014, according to tax records. It’s now assessed at $225 million.
Trump Plaza’s value fell from $209 million in 2014, when it closed, to nearly $31 million in 2017.
The city assessed Tropicana at $580 million this year, down from $680 million in 2014.
The city’s total tax base has dropped from $20.5 billion in 2010 to $6.5 billion in 2016. The city had $224 million in bonded debt as of last year, mostly related to casino tax appeals. The city is borrowing to pay for the $72 million Borgata tax settlement.
Icahn recently sold the Taj Mahal to a group of investors led by Hard Rock International, which plans to spend $375 million refurbishing and reopening the casino. A sale price was not disclosed.
Icahn Enterprises Inc. valued Trump Entertainment, a subsidiary that owns the Taj and Plaza, at $86 million, according to the company’s 2016 fourth quarter financial report. The report valued Tropicana Entertainment, which owns eight casinos, at $862 million.
Icahn has had a tumultuous relationship with officials and stakeholders in the city and state.
He closed Taj Mahal amid a labor strike from Unite Here Local 54 workers. Senate President Stephen Sweeney, D-Gloucester, Salem, Cumberland, then sponsored a bill to punish Icahn for closing the casino, but Christie vetoed it.
“Why doesn’t he just help Atlantic City for once, instead of trying to hurt the city?” Sweeney said of Icahn this month when Hard Rock announced its plans for the former Taj Mahal.