Aug. 26--The closure of three Atlantic City casinos by mid-September will wipe $2 billion from the city's property-tax values next year, exacerbating the already cash-strapped city's financial plight, Mayor Don Guardian warned Tuesday.
By 2017, Guardian said on a conference call to discuss Atlantic City's way forward as a tourism center following the rout of its casino industry, property values are expected to have fallen to as little as $7.5 billion from $20 billion five years ago.
In the short term, Guardian said the New Jersey Department of Community Affairs has made money "available for some bridge loans to make sure that the city continues functioning with this year's budget because of any concern that we might have that a casino's closing, going bankrupt might hold off payments."
Over the next four years, the city needs to trim $40 million from its budget, Guardian said. The city recently passed a 2014 budget of $261.4 million.
Part of the savings will come from the elimination of entire departments, though Guardian said he couldn't name them at this point. As many as 300 positions must be eliminated from the city's workforce, some of which have already disappeared because of attrition, he said. As of July, 2013, Atlantic City had 1,267 full-time employees, according to a bond prospectus.
The Department of Community Affairs has also agreed to back a $140 million municipal bond offering that will be used to pay tax refunds and settlements. For example, the city owes the owner of Borgata $88 million for tax settlements covering the years 2011 through 2013.
The state backing will save Atlantic City from going into the bond market with a junk-bond rating, which "will considerably reduce the interest and, over the 25 years, will result in tens of millions of dollars of savings," Guardian said.
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