Senate leader says Christie is trying to force Atlantic City into bankruptcy, threatens to sue

MarketsAssociated Press

The state Senate president said Thursday that Republican Gov. Chris Christie is trying to force Atlantic City into bankruptcy, and he threatened to go to court if that's what the men appointed to revive the beleaguered gambling resort's finances try to do.

Democrat Steve Sweeney broke his silence a week after Christie appointed a corporate turnaround specialist as the city's emergency manager and hired the man who led Detroit through its municipal bankruptcy as a consultant.

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The decision eroded the city's bond rating and could have a negative financial ripple effect on New Jersey's other cities, the Senate president said.

"We cannot nor will we ever allow the city to go bankrupt," Sweeney said.

Speaking at a New Jersey Conference of Mayors meeting, Sweeney told Republican Atlantic City Mayor Don Guardian, who was in the audience, "I've got your back."

"We might have to get into a big fight here," he told the mayors.

Corporate finance expert Kevin Lavin and consultant Kevyn Orr have said it was premature to talk of a Detroit-style bankruptcy filing for Atlantic City.

"I can't wait any longer," Christie said after appointing the men last week. "We need to take more aggressive action. We are digging out of an enormous hole."

An email seeking comment on Sweeney's reaction Thursday to a Christie spokesman wasn't immediately returned.

The seaside resort lost four of its 12 casinos last year, and three others are in bankruptcy. The governor said the city's 40,000 residents are struggling to pay taxes needed to support its $260 million budget, and the local tax rate has doubled since 2010.

Sweeney claimed Christie picked a turnaround expert to bolster his image among Republicans as he considers seeking the party's 2016 presidential nomination.

Democrats led by Sweeney want to let casinos make payments in lieu of taxes — called the PILOT plan — and help reduce the city's debt.

The idea is to give the casinos cost certainty while eliminating expensive and unpredictable tax appeals that have deprived Atlantic City's treasury of tens of millions of dollars in recent years.