Emergency manager says changes could help A.C. PILOTFriday, August 14, 2015 By John V. Santore

Atlantic City’s emergency manager would shorten the length of the casino payment-in-lieu-of-taxes legislation and direct more casino money to the city, Atlantic City Mayor Don Guardian said.

Kevin Lavin has told Guardian that changes to the PILOT package would help the city, the mayor said. But whether Lavin’s reservations have delayed the bills’ passage is unclear.

The Senate and Assembly passed the PILOT in June, but Gov. Chris Christie has not signed it.

“The legislation remains under review, ” Christie spokeswoman Nicole Sizemore said when asked if Lavin’s assessment has affected the governor’s approach to the bills.

Guardian said he shares Lavin’s concerns, but that while altering the PILOT might be appealing in theory, restructuring the bills would require securing the consent of Atlantic City’s casinos again, and passing another package through the legislature, a task that’s too risky to attempt.

“I can’t gamble with the city’s future,” Guardian said. “I think the best bet is keeping the bills as they are now. I have to realize that it was the gaming properties that initially came in and said (they) would agree to these standards.”

The PILOT requires casinos to collectively pay $120 million so long as the industry’s annual gross gaming revenue stays between $2.2 billion and $2.6 billion. The payment would increase or drop if gaming revenue totals grow beyond, or decrease below, that range.

The Casino Association of New Jersey, a strong PILOT supporter, declined to comment on Guardian’s remarks, as did Bill Nowling, Lavin’s spokesman.

Lavin’s critiques have focused on several aspects of the PILOT package, Guardian said.

Specifically, Lavin has suggested extending the PILOT’s redirection of funds from the Atlantic City Alliance to the municipality beyond its current two-year limit. The legislation currently defunds the ACA, sending its $30 million annual budget to the city in 2015 and 2016.

Guardian also said Lavin favors shortening the PILOT’s time frame to between three and five years, rather than its current 15-year length.

Lavin has also told Guardian he is open to tying the PILOT to the casinos’ gross revenue, which involves money connected to all casino business, rather than gross gaming revenue, which is what the casinos make at their tables and slots.

Despite his concern about the bills, Guardian said failing to pass them now could result in a domino effect of casino appeals next year, starting with investor Carl Icahn.

Guardian said casino appeals remain a very real threat, even though he believes Atlantic City’s real estate market has come close to bottoming out.

Icahn is set to take ownership of Trump Entertainment Resorts after its ongoing bankruptcy process has concluded. That would give him control of Trump Taj Mahal. And while that property was valued at $850 million in 2014, Guardian said Icahn is likely to argue it’s worth less than $300 million.

Seeing that, other casino properties could follow suit, Guardian said. If successful, those appeals would significantly erode the city’s remaining tax base.

The PILOT, however, prevents participating casinos from appealing their taxes, a scenario Guardian said is preferable to the one he described and fears would come to pass.