Should taxpayers pay $300M for casino in Atlantic City?
Firm took a $10B government bailout, gave $14B in salary, bonuses to employees
Fresh from using $10 billion in federal bailout money to save itself, Morgan Stanley is now gambling that its investment in a 1,900-room casino-hotel on Atlantic City's boardwalk will hit another type of jackpot.
Morgan Stanley has provided most of the financing for the $2 billion casino project being built by Revel Entertainment Group in Atlantic City's South Inlet section. Work has continued on the exterior of the structure, but construction of the casino's interior was halted in January 2009 to await additional financing.
New Jersey's TIF law was revised last year as part of the Economic Stimulus Act of 2009. Before the revision, nine taxes, including one state-level tax, could be included in a TIF grant. Now 11 state taxes and 11 local taxes can be diverted to developers for up to 20 years.
"I watched from a distance and was aghast," LeRoy said of the revisions to the TIF law. "It's highly unusual to allow that much of a diversion." [Greg LeRoy, executive director of Good Jobs First, a Washington, D.C.-based organization that studies economic development.]
LOCAL CONTROL REMOVED. This is a consistent pattern around the country, much as Lincoln, RI residents overwhelmingly opposed 24/7 gambling at Twin Rivers --
State Sen. Raymond Lesniak, D-Union, sponsored the Economic Stimulus Act and also co-sponsored S-920, a bill that would ban referendums on local redevelopment ordinances. The latter bill, which was approved by the full Senate Feb. 22, was in response to Unite Here members' attempts to have a city ordinance authorizing the tax incentive plan revoked through a public referendum.
"Revel is not just another casino," Lesniak said at a Senate Economic Development Committee hearing on S-920 held Feb. 1. "It is a $2 billion investment in making Atlantic City a tourist destination, something that must happen for it to compete with new gambling operations in neighboring states."
Tourist Destination? Where have we heard that before?
Revel has also sought a $56 million municipal bond to help with road improvements around the project, and has applied for a five-year property tax abatement from Atlantic City that would save the company $50 million in local property taxes.
There's more information available: No Morgan Stanley Bailout
Recent Study Examines Poverty in Atlantic City
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A high proportion of casino jobs are open to low-skill workers, and on any given day, many go unfilled. Yet in 1999 the city’s poverty rate was 23.6 percent, while the national rate was 11.3 percent; unemployment stood at 12.9 percent in 2000, compared to 5.8 percent in the nation.3 The city’s poverty rate is actually a bit higher than before the beginning of legalized gambling in 1978, when the city was in sharp economic decline,....
...the low-skill service jobs available in casinos or other industries may not provide enough income to escape poverty. Residents often noted that they or someone they knew held two or three casino jobs in order to make ends meet.
Maybe Beacon Hill can pretend gambling is something it isn't, but the stark facts are available for all to see.
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