Atlantic City is looking for a way to fight off debt, especially since the city faces a takeover by the state. Yesterday, Mayor Don Guardian stated that the city will be able to earn around $100 million by selling Bader Field airport property, which is city-owned, to the Municipal Utilities Authority of Atlantic City.
The money earned by the sale would then be used to pay down a portion of the debt owed. State officials are seeking some form of payment of the debt in order to avoid taking over the resort-town. The move will also keep the water utility from going from state-owned to privately run.
Atlantic City is currently running close to defaulting on an emergency state loan of $73 million. However, the city claims they have enough funds to pay the debt off. The sale of the Bader Field property will be collateral used by the city for the state loan. However, Guardian stated that city still has one year to be able to monetize the utility authority before the state can step in.
The $73 million in loan monies was provided earlier this year and the state says the city is in danger of defaulting on the loan. The mayor of Atlantic City says that there is enough money, more in fact. The mayor says the city has casino marketing funds that have been diverted, as much as $60 million, as well as almost $20 million from casino reinvestment taxes that can be used to cover a payment Atlantic City must make by next week.
The goal is to use the $100 million to pay down the debt, which is a demand by the state and keep the water utility in the city’s hands. The Executive Director of the water authority, G. Bruce Ward, stated that the authority will not dispose of the property until an agreement is made with the city. Guardian has suggested that Stockton University may eventually like to take on the land which could have many uses for the campus such as dormitories or athletic use.
According to the mayor, the sale of the land is the first initiative out of seven to help in majorly reducing the debt the city has and rollouts will be taking place within the coming weeks for these plans to try and avoid the state takeover as well as filing for bankruptcy.