The house always wins. In this case, the house is Hard Rock International and the loser is New Jersey’s Atlantic City. A report by the Press of Atlantic City reveals that Hard Rock has won a dispute over tax obligations in the city and will now receive $4.8 million from Atlantic City’s wallet.
Atlantic City will have to pay $1.2 million a year for four years, with the financial obligation beginning next year, according to a spokesperson for the city’s Department of Community Affairs, Lisa M. Ryan. The county in which Atlantic City lies, Atlantic County, will be responsible for 8% of the tab.
Dennis Levinson, Atlantic County Executive, stated, “We were told this was totally, completely settled. They can do whatever they want right now, as long as the cost is not passed along to county taxpayers.”
In 2017, New Jersey had asserted that all casino tax appeals, worth around $80 million, had been settled and bonded by Atlantic City. However, one small action had been overlooked. Ryan states, “Because of the timing of Hard Rock’s purchase of the [Taj Mahal Casino Resort] and the work that needed to be done to get the casino into the PILOT (payment in lieu of taxes agreement for casinos), the 2017 appeal was not able to be included in the $80 million bond ordinance the city approved in August 2017 to fund other property-tax appeals.”
From 2014 to 2017, tax appeals for different casino venues were to be covered by settlements. However, the Trump property was only covered, at the time, through 2016 since it closed that year.
The PILOT program has caused more harm than good. One casino, Revel Casino Hotel, had to resort to suing the state in 2017 over the program. New Jersey also sold $68 million in bonds to fund the tax-appeal settlements related to cases with Borgata, Caesars, Golden Nugget, Tropicana, Harrah’s, Bally’s and two then-Trump properties.
Apparently, the deal with Hard Rock finally brings the matter to a close. Ryan states that there are no more tax appeal issues to be addressed by either previous casinos or casinos that are currently operating.
