ATLANTIC CITY, N.J. – Revel has finally won something.
Continue Reading Below
The former Atlantic City casino is getting a big tax break this year under a settlement it reached with the city and will see its property tax assessment for 2015 be reduced from $625 million to $225 million.
Its 2015 assessment was originally set to be $1.15 billion.
Documents filed in bankruptcy court Wednesday show Revel's quarterly tax payment due on Sunday would have been nearly $10 million. It will now be less than $2 million.
The city has yet to strike a municipal tax rate for 2015, but at current rates, that would indicate an annual tax reduction from $39.52 million to $7.52 million.
Revel, which cost $2.4 billion to build, never turned a profit in its two-plus years of operation, and shut down last September.
Continue Reading Below
It is being sold to Florida developer Glenn Straub for $95.4 million. The sale is due to close by Feb. 7.
Atlantic City officials did not immediately return messages seeking comment. In Wednesday's filings, Revel wrote that "such savings substantially benefit the debtors' estates as well as any successor in interest who acquires" it.
It added that Revel and Atlantic City negotiated the deal "in good faith and at arm's length."
Tax appeals have cost Atlantic City dearly, devastating municipal finances in recent years as the casinos successfully challenged their assessments by arguing that their gambling halls are worth less in an area of declining revenue and increasing competition in neighboring states. Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.74 billion last year.
Four of the city's 12 casinos shut down last year, and three of the surviving ones are in bankruptcy.
Under a plan being considered in the state legislature, the casinos would make payments in lieu of taxes for 15 years, in return for foregoing their right to file tax appeals. The proposal, made by state Senate President Steve Sweeney and Sen. James Whelan, a former Atlantic City mayor, is designed to give the casinos cost certainty for years in advance, while letting the city know it can count on a certain level of revenue that won't be challenged in tax court.
Wayne Parry can be reached at http://twitter.com/WayneParryAC