New Jersey politicians have put forward legislation intended to stuff a financial cork into Atlantic City’s leaking dike. Bills introduced on Monday by Senate President Stephen Sweeney and Sen. Jim Whelan would allow casinos to collectively make fixed payments of $150m in lieu of taxes for two years, a sum smaller than what the casinos are currently paying in tax.
The payment plan will allow the city to plan its budget using a predictable revenue figure and would also eliminate the costly tax appeals that have forced the city to refund millions of dollars to casinos in recent years. A further $25m to $30m in alternative investment tax would be reallocated from redevelopment projects to help pay off the city’s debt.
The legislation would also establish minimum health and retirement benefits for casino workers, a key factor in the ongoing labor dispute between the Trump Taj Mahal and its unionized employees. The Taj’s owners had also been seeking millions of dollars in state aid to keep the joint open. Asked by the Associated Press whether the plans introduced on Monday were sufficient to resolve the dispute, Trump Entertainment Resorts CEO Robert Griffin said only: “We will see.”
The Taj Mahal is scheduled to close on Dec. 12 without some resolution to the dispute. Last week, the casino’s main creditor Carl Icahn agreed to lend Trump Entertainment $5m to pay its bankruptcy expenses through January, which offered hope that a deal to rescue the Taj was close. The Taj now says it has enough cash to continue operating until Jan. 16.
At the same time, Icahn wrote an open letter to Unite Here president Bob McDevitt, pleading with him to drop the union’s appeal of the court order voiding the workers’ health and pension benefits. Trump Entertainment has offered to restore health benefits for at least two years and contribute to a new pension scheme, but only if the union dropped its appeal. Icahn urged McDevitt to act now as “there is no time left to negotiate.”
On Monday, Trump Entertainment upped the ante, announcing that it was immediately closing one of its two hotel towers and had stopped issuing credit to customers. In a filing with the Division of Gaming Enforcement, Trump also laid out a detailed timeline for the casino’s scheduled closing. The casino will close at 5:59am on Dec. 12 and hotel guests will have until noon to stuff Taj towels into their suitcases. The casino’s bar and restaurant vendors have also been told to prepare “wind-down” plans.
The Unite Here union has so far been publicly mum as to its response to Trump’s warning shot. Should the Taj Mahal close as planned, it would be the fifth AC casino to shut down this year, following the Atlantic Club, Showboat, Trump Plaza and Revel.
