ATLANTIC CITY — The city is owed more than $9.4 million in unpaid taxes, and several major developers, including some who were hailed as pivotal to the city’s rebirth as a first-class resort, are responsible for large portions of overdue payments, according to a tax-sale list.
Philadelphia real estate developer Bart Blatstein, Florida-based TJM Properties and former Revel Casino Hotel owner Glenn Straub all owe the city taxes, totaling nearly $4 million.
Representatives for TJM Properties and Straub did not respond to requests for comment.
Bart Blatstein's investments in Atlantic City were unfairly assessed, and it's estimated he overpaid his taxes by $2 million, said Lisa Johnson, a spokesperson for Blatstein.
"Why would he pay $2 million now just to turn around and have the city refund him the estimated $2 million that's owed back to him? Bart has been working closely with state and city officials on a fair assessment and payment plan," Johnson said.
Showboat was assessed for $23 million, but he paid that much because of all the furniture, kitchen equipment and other items inside of it, Johnson said. He bought the volleyball courts for $3.8 million, and then, they were assessed at $18 million, she said.
"He's been one of Atlantic City's key developers over the past few years and certainly should not be categorized as someone who is not contributing to taxes," Johnson said.
With significant real estate investments on or near the Boardwalk, and in other less-developed areas of the city, such as the South Inlet, each has, at one time or another, been viewed as a catalyst for renewed outside interest in Atlantic City.
The tax-sale list, posted on the city’s website, is current as of Nov. 16.
In a tax sale, a municipality auctions off the unpaid debt on a property to an investor or group of investors. Those investors then hold a lien against the property to be repaid by the owner.
The state Department of Community Affairs, which oversees the city’s finances, said it expects the tax sale to be successful and to help Atlantic City plug revenue shortfalls.
“Atlantic City will avail itself of a tax sale whereby it can collect the revenue immediately for use and doesn’t have to wait for property owners to pay their outstanding taxes,” said Lisa Ryan, spokeswoman for DCA. “This gives the city budget continuity and financial stability.”
Blatstein owns the Showboat Atlantic City Hotel, Garden Pier and Playground Pier. According to the tax-sale list, Blatstein owes slightly more than $2 million, with nearly $900,000 of those taxes from the Showboat, which he purchased in 2016 for $23 million from Stockton University.
Last month, Blatstein had an application approved by the Casino Reinvestment Development Authority to convert 400 hotel rooms in the Showboat into 264 market-rate apartments.
While the CRDA’s application for land-use and zoning variances has a question about owed taxes, the authority does not consider delinquent payments when considering initial approval, said Lance Landgraf, CRDA’s director of planning and development.
As a state entity, all actions by the CRDA board are subject to review by the governor.
The unpaid taxes could potentially impact Blatstein’s plans for the former casino property. CRDA can reject the final application or require complete payment as a condition of approval if the taxes remain unpaid.
“We make sure taxes have been paid before final approval,” said Landgraf.
TJM, owner of the Claridge hotel and the former Atlantic Club Casino Hotel, is responsible for more than $1.5 million in taxes, according to the city’s tax sale list. The company purchased the Claridge from Caesars Entertainment Corp. in 2014 for $12.5 million. Later that year, TJM purchased the now-vacant Atlantic Club for $13.5 million from a Caesars affiliate.
In 2015, City Council, with CRDA’s approval, entered into a lease agreement with TJM that allowed the Claridge to use the adjacent Brighton Park for events in exchange for maintenance of the city-owned property.
Earlier this year, TJM and Stockton University came close to a deal on the Atlantic Club. Stockton wanted the former casino hotel’s parking garage to supplement its supply at its new Gateway Campus in Atlantic City. The deal fell through, and TJM said it was in discussions with other prospective buyers.
Straub, who owns or has partial ownership of more than 50 land parcels in Atlantic City through his Polo North County Club LLC, owes nearly $123,000 in unpaid taxes. All 43 of the properties that list Polo North as the owner owe taxes to the city. Two of Polo North’s Boardwalk properties owe five-figure tax payments, while the remaining properties have outstanding tax obligations of less than $10,000.
The city will hold an online auction for 2018 and prior-year delinquent taxes at 8:30 a.m. Dec. 17. All of New Jersey’s 565 municipalities are required by law to hold at least one tax sale per year.