Home > Gambling, New Jersey > Atlantic City Casino Property Tax Appeals Settled

Atlantic City Casino Property Tax Appeals Settled

Some Atlantic City casinos just became richer. It’s not because of a massive losing streak from its patrons, however. Instead, it’s because of a recent tax-appeal settlement cutting property values of three casinos by 35 percent.

Atlantic City has agreed to give $26.96 million back to Caesars Entertainment Corp. From 2009 to 2011, Caesars had paid property taxes for Bally’s Atlantic City based on the property being valued at $1.5 billion.

The Atlantic City Council agreed to settle the appeal filed by Caesars by reducing the Bally’s property valuation to $700 million.

Previously, property values for casinos were based on their land and buildings. Since the economic downturn, the casinos opted to take financial performance into account.

Atlantic City Mayor Lorenzo Langford claims the change to how casino properties are valued for purposes of the property tax is not fair:

“If the state of New Jersey really wants to assist the city, they should mandate that the casinos be assessed in the same way and manner as residential properties,” Langford said. “Property taxes are not reduced on the residential side if a property owner suffers a reduction in income or mismanages their financial affairs. Why should casinos be treated differently?”

Because the casinos are now paying less property tax, a budget shortfall is expected. The ultimate losers of these settlements may be the other local property owners.

  1. Matthew Rappaport
    March 26, 2012 at 5:13 pm

    Mayor Langford makes a nice populist argument, but it’s a red herring. Commercial and residential properties are treated differently in several areas of the law, not just tax. You can easily turn that argument around the other way– and residential homeowners and tenants would NOT be happy if they were held to the same standards and commercial landowners and tenants. The bank or the landlord took advantage of you during the financing process or slipped a grossly unfair provision into a contract? Tell those people to grin and bear it– and see what happens.

    Look at it a different way: should residential properties have been assessed at the same levels during the post-crash years despite a clear plummet in the market? This is the pot calling the kettle black.

    The value of a commercial property is based on how much money it can generate for the owner. In the era of higher capitalization rates and lower rent rolls, the value of commercial properties has taken a temporary nose-dive. Caesars had every right to appeal their assessment, considering the gaming industry took a big hit between 2009 and 2011. With lower incomes, their property became worth less money. It’s that simple. There shouldn’t be a difference in treatment based on the fact that their income isn’t derived from rent.

    Mayor Langford is also losing sight of the long-term considerations, which is typical of a politician. When Caesars wants to open a new casino, you want them to turn to AC rather than the various other northeastern locales that are now legalizing gambling. Better yet, what happens if Caesars decides it just wants to move its existing hotels? With hundreds of millions of dollars at stake, they’re well within sound economic judgment to simply pack up and leave for greener pastures.

    And if you don’t think some other municipality would be willing to welcome a giant like Caesars with open arms, you’re kidding yourself.

  2. May 30, 2012 at 11:15 am

    This is a major concern to the city’s administration and to everybody. It’s 11 (casino) properties, and they make up 38 (percent) or 39 percent of the (city’s) ratable base, and 25 percent of the county’s (ratable base). So having these drops doesn’t just affect the city, it affects the county as well.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s