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ATLANTIC CITY – (Associated Press) - By most accounts, the Borgata has been Atlantic City’s golden goose, providing the most jobs and tax revenue in the seaside gambling resort.
It’s even wrapped in gold-tinted glass that bathes the surrounding neighborhood in a golden glow when the sun hits it just right.
But the goose isn’t laying any more golden eggs anytime soon.
The Borgata is refusing to make a $7.2 million tax payment due Wednesday; it is owed more than $170 million in tax appeals it has won from Atlantic City, and the city says it can’t pay that much.
Last week, a judge allowed the Borgata to stop making tax payments while both sides explore a settlement. The court reaffirmed the city’s obligation to pay $62.5 million in payments for tax years 2009-10.
In addition to that debt, the Borgata reached a settlement with the city for tax years 2011-14 of $88.25 million, which was supposed to be paid by Dec. 31, 2014. It was not, and both sides continued to talk, but no agreement was reached.
The $170 million figure includes interest. The failure of the city to meet the 2014 deadline enabled the Borgata to reinstate its tax appeals for those four years.
Mayor Don Guardian says the city is in danger of running out of money and declaring bankruptcy. He said last week that having the Borgata skip the tax payment due Wednesday would be “devastating.”
Borgata executives declined comment Wednesday; last week they said they have tried to reach an agreement with the city, which they accused of failing to bargain seriously.
The Borgata is not the only large taxpayer to successfully challenge its tax assessments as the Atlantic City casino market continues to shrink, falling from $5.2 billion in 2006 to $2.56 billion last year. The casinos — and individual home and business owners, as well — are often able to convince a tax court that their properties are worth less than the city says they are, and as a result, they win a reduction of their assessment.
That has blown a big hole in the city’s budget in recent years, forcing city officials to scramble to replace the lost money.
Since it opened in 2003, the Borgata has dominated the Atlantic City casino market. It routinely takes in the most money from gamblers, sometimes by nearly twice as much as its closest competitor.
It is also the largest casino employer; its 5,803 jobs as of Feb. 2 represent nearly 25 percent of all casino jobs in Atlantic City.
The Borgata has paid nearly a half-billion dollars in taxes since it opened, helping to fund a city government that’s now under fire from state officials who intend to take control of the city’s finances, citing years of overspending and misanagement.
It also routinely reinvests tens of millions of dollars back into its properties.
