Atlantic City Mayor Predicts City Will Heal In 2015
ATLANTIC CITY, N.J. (AP) — Mayor Don Guardian predicts 2015 will be "a year of healing" for his shell-shocked seaside resort — even as he expects it to lose yet another casino.
As the city's first Republican mayor in 23 years, Guardian took office a year ago pledging "a root canal" for the city — extremely painful but highly necessary — with himself doing the drilling to tame a bloated, out-of-control budget.
But he had no idea how much worse things actually would get: Four of the city's 12 casinos closed, putting 8,000 people out of work. A fifth, the Trump Taj Mahal, narrowly avoided joining them with a last-minute financing deal from billionaire investor Carl Icahn just before Christmas to save that casino's 3,000 jobs.
Atlantic City, once the nation's second-largest casino market after Nevada, was overtaken by Pennsylvania for the No. 2 spot in 2012 as ever-increasing competition in the saturated Northeastern U.S. casino market continued unabated.
Guardian predicts things will settle down this year.
"For 2015, I think it's going to be a year of healing," he told The Associated Press in a year-end interview. "It's a year of progress."
He listed a new Bass Pro Shops outlet store, the conversion of a former casino into a college campus, the revamping of the Pier Shops at Caesars and the opening of a new convention center at Harrah's as positive developments expected this year.
Yet that progress will come at a price. Guardian said he expects another of the city's eight remaining casinos to close in 2015. And while he would not name it, his description of it sounded a lot like Bally's Atlantic City, which the CEO of parent company Caesars Entertainment seemed to put on notice in October, saying, "We need to make money there."
Caesars already shuttered the still-profitable Showboat, which closed Aug. 31, to help reduce competition for its remaining three Atlantic City casinos. Now it's trying to reduce its debt-laden balance sheets.
As Revel and Trump Plaza went belly up in September, Guardian remained even-keeled even as some urged him to show some emotion.
"You just have to accept what happens," he said. "It's almost like, 'Why does a flood occur, or why does a hurricane happen?'"
The loss of four casinos blew an unexpected hole in the city's finances — which were atrocious to begin with. Six years ago, Atlantic City's taxable property was worth $20 billion; that figure is now $11.2 billion, and Guardian expects it to shrink to about $7 billion before long.
Steep spending cuts and layoffs that were already planned suddenly had to get even more drastic. Taxes went up 22 percent in his first year. Guardian planned to cut city spending by $40 million over the next four years; he now plans to cut that much in three years. Layoffs will include police officers and firefighters, and an entire department of city government could be eliminated.
The fate of his city is being hotly debated in state government in Trenton, where at least three proposals aim to help Atlantic City's casinos and finances. One would let casinos make reduced payments in lieu of taxes for 15 years and would redirect an investment tax used for redevelopment projects to pay down some of the city's long-term debt. It would end the ruinous tax appeals that have tormented city finances in recent years. Another would impose an all-powerful city manager on Atlantic City with vast control over spending and operations — something Guardian considers unnecessary because the city already has a state monitor.
Guardian is confident his city will emerge from the turmoil in better, more sustainable shape.
"There's no doubt it was a very painful root canal, and I am very sorry for the people that lost their jobs, and for the taxes that had to be increased," he said. "But just like when you get a whole mouth of teeth with a root canal and you're happy you (made) that decision, the city will be happy with this three or four years down the road."
(Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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