FOR IMMEDIATE RELEASE: Thursday, September 21, 2017


Bonds Sell Quickly and at Very Attractive Interest Rate for the City

Trenton, NJ – The Christie Administration today announced the successful sale of bonds to finance property tax appeal settlements the State negotiated earlier this year with seven casinos, including Bally’s Atlantic City, Caesars Atlantic City, Golden Nugget Atlantic City, Harrah’s Atlantic City, Tropicana Casino & Resort, the former Taj Mahal Atlantic City, and the former Trump Plaza Hotel and Casino. The $68.3 million in tax appeal refunding bonds sold rapidly and at a very attractive true interest cost of 4.1 percent, demonstrating that investors view the State’s involvement in Atlantic City as having a stabilizing influence on the City’s finances. 

“Atlantic City is now getting excellent access to the bond market, which is amazing for a city that was contemplating bankruptcy before we stepped in to manage its finances,” said former U.S. Senator Jeffrey S. Chiesa, the State Designee leading the financial recovery effort for Atlantic City. “The fact that the City obtained bond insurance and sold the bonds at a low interest cost means it is well-positioned to responsibly pay down the tax refunds it owes to casinos while preserving critical public services.” 

The bonds that sold yesterday under the State’s Municipal Qualified Bond Act program will finance all the remaining property tax appeals filed by casino properties that the City faced and two non-casino tax appeals. These include appeals for 2016 for Bally’s, Caesars, Golden Nugget and Harrah’s; for the years 2015 and 2016 for Tropicana; for the years 2014-2016 for the former Taj Mahal; and for the years 2014-2017 for the former Trump Plaza. The appeal settlements total approximately $71.1 million. 

Yesterday’s bond sale follows another successful one in May of this year in which the City quickly sold $69.8 million in bonds at a true interest cost of 4.66 percent. Those bonds funded the $72 million settlement the State negotiated with MGM Resorts International, which owns Borgata Hotel Casino & Spa; a settlement that was less than half of the $158 million in property tax appeal judgements and claims for the Borgata. 

By comparison, tax-exempt bonds the City sold in 2015 under the State’s Municipal Qualified Bond Act had a true interest cost of over 6 percent despite those 2015 bonds having a lower par amount and shorter maturity schedule. 

“Through a lot of hard work, we resolved all outstanding property tax appeals filed by casinos in the City through settlement agreements that are saving the City millions of dollars, we implemented a plan to finance this debt that fits within the City’s budget, and we shepherded the successful sale of bonds, which sold at very attractive interest rates for the City, to fund this debt that heretofore had been crushing the City,” Senator Chiesa said. “The City is in a much better place and is back on the road to stability.” 

Earlier this year, City property owners received their first municipal property tax decrease in a decade due to cost savings that resulted from the State’s work to change the salaries, benefits and work schedules of City employees and to outsource municipal services to private vendors that can do the work more efficiently than the City. The municipal tax decrease contributed substantially to this year’s double-digit tax reduction in the City’s overall property tax rate. 

All this progress has put the City in a better position to attract investment as demonstrated by Hard Rock’s plans for the former Taj Mahal casino property, Stockton University’s development of an Atlantic City campus, and MGM Resorts’ and Caesars’ potential plans for new projects. 

Yesterday’s bonds are expected to close on October 4, 2017. 



Lisa Ryan
Tammori Petty
(609) 292-6055