Could The NJ Takeover Of Atlantic City Be Coming To An End?

Posted By Bart Shirley on February 12, 2018 - Last Updated on April 17, 2020

Gov. Phil Murphy and Atlantic City Mayor Frank Gilliam met recently to discuss the state’s takeover of the city’s administration.

As brand new officeholders, the two men met to open a dialogue regarding the relationship between state and city in 2018.

Murphy later remarked that he prefers a more cooperative approach to the state’s management. He spoke of the state as a partner to Atlantic City.

Gilliam, for his part, echoed the governor’s desired approach. He said that he neither expects nor wants the state to pack up and leave suddenly.

The takeover remains unpopular for Atlantic City residents

The state’s move into city business has been a sore spot for residents of AC. Even before the state moved in, most inhabitants were against the takeover.

The negative sentiments prompted demands for meetings with then-Gov. Chris Christie in 2016. Residents felt that the state was not considering those most affected by the takeover.

The anger over the takeover even drew the president of the NAACP to Atlantic City in April 2017. Cornell Brooks blasted the impersonality of the administration. In an acidic speech, he called the takeover a “profound injustice.”

The state’s move has been bitter but necessary medicine for Atlantic City

Despite these comments, the reality was that Atlantic City was in terrible trouble. The city was suffering under hundreds of millions of dollars of debt.

Even worse, the city management’s budget forecasted increasing deficits and debt. To combat these shortfalls, the city kept raising its taxes, even as the city economy soured.

Alarmingly, four Atlantic City casinos closed in 2014 alone. A fifth, the landmark Trump Taj Mahal, followed in 2016.

Despite the woeful situation, both then-Mayor Don Guardian and New Jersey Assembly Speaker Vincent Prieto fought desperately against the state takeover. Ultimately, the state passed the Municipal Stabilization and Recovery Act.

The new law’s effect was to send in a management team, including former Sen. Jeffrey Chiesa, to clean things up. The effect was almost immediate, with a renegotiation with Borgata saving the city $93 million.

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More good news for AC

Even more promisingly, last year’s budget featured $35 million less in expenditures and a reduced tax on citizens. Business investment is beginning to trickle back into the city.

Notably, Bruce Deifik and a group of investors purchased the former Revel/TEN casino. He is now renovating the property to become the new Ocean Resort Casino.

Despite these positive changes, the takeover’s continuing lack of popularity demands attention from politicians who are accountable to the voting public. Pointedly, new Lt. Gov. Sheila Oliver’s inauguration speech touched on her desire to get the state out of the city.

As usual, only time (and money) will tell.

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Bart Shirley

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.

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