ATLANTIC CITY, N.J. (AP) - Cash-strapped Atlantic City thinks it has found a way to pay off debt while fighting off a threatened state takeover.
Mayor Don Guardian said Monday the city’s Municipal Utilities Authority will buy the former Bader Field airport property from the city for about $100 million.
The city will use the money to pay down debt - a key demand from state officials who are threatening to take over the resort. It also will keep the much-coveted water utility out of state or private hands.
State officials declined to comment.
Atlantic City is nearing default on a $73 million emergency state loan, but says there is more than enough money to pay it off.
The move was the latest in a long-running struggle between the administration of Republican Gov. Chris Christie and the city, headed by a Republican mayor desperately trying to avoid having the city’s assets seized and major decision-making power taken over by the state.
“It’s hard for them to be against a plan that’s exactly what they wanted in the first place,” Guardian said. “It makes absolutely no sense, other than vengeance, to stop this deal.”
Proceeds from a Bader Field sale are part of the collateral the city put up against its state loan, but Guardian said the city has one year to monetize its utilities authority before the state can intervene.
Bader Field was the first aviation facility anywhere in the world to be called an “airport.”
Atlantic City’s finances have been teetering for years as its major employer, the casino industry, continues to crumble. Four of its 12 casinos went out of business in 2014, and another, the Trump Taj Mahal, is due to close in about two weeks.
The state gave Atlantic City an emergency $73 million loan earlier this year that the city is in danger of defaulting on soon. But Guardian insists there is more than enough money in diverted casino marketing funds ($60 million) and casino reinvestment taxes (nearly $20 million) to cover the payment that’s due next week.
The sale of Bader Field to the utilities authority will enable the city to pay down $100 million of debt - a key state demand - while keeping the water utility out of private hands - a city priority.
G. Bruce Ward, the authority’s executive director, said the authority will not dispose of the property without first getting an agreement from the city. Guardian suggested that Stockton University, which is building a new campus next to the land, may eventually want some or all of it for athletic fields, an athletic building or dormitories.
In the meantime, the city is prepared to wait until the real estate market improves and the land is worth more than it is now. The city tried to sell Bader Field this year, but did not get bids in excess of $50 million, or about half what the city feels it is worth.
“In 10, 15, 20 years, the authority is going to be regarded as financial geniuses for doing this,” Guardian said.
The mayor said the land sale is the first of seven major debt reduction initiatives his administration will roll out in coming weeks to fend off a state takeover and avoid the need for a bankruptcy filing.
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