Rescue package for Atlantic City goes to Christie

New Jersey lawmakers on Thursday sent Governor Chris Christie legislation to keep Atlantic City from running out of cash, throwing the financially-strapped resort a life preserver just before the unofficial start to summer this weekend.

The Democrat-led Assembly and state Senate approved the measures by wide margins just as the state's 127 miles of beaches prepare for the Memorial Day holiday. Republican Governor Christie, who earlier supported legislation allowing for an immediate state takeover of the city's finances, has said the bill gives him the authority he needs. He stopped short of saying whether he will sign the bill, but said he will decide quickly.

"It's huge," Atlantic City Mayor Don Guardian, a Republican, said. "We want people to know the shore is open for business."

The deal, reached earlier this week, ended a nearly five-month-long political fight that pushed the resort towards bankruptcy and spared the city from an immediate state takeover for at least five months. The city government has five months to draw up plans to balance its books over the next five years.

Jim Allen, CEO of Seminole Gaming and Hard Rock International, decried the impasse that led to Thursday's votes.

"What went on in New Jersey the last 30 days, 60 days, 120 days is not good for New Jersey and not good for our industry," he said.

Hard Rock has said it would seek to operate a proposed Meadowlands casino if voters approve two new casinos in northern New Jersey.

Immediate takeover

Assembly Speaker Vincent Prieto hailed the passage as an improvement over an earlier Senate- and Christie-backed bill that provided for an immediate takeover.

"This is a compromise that we have worked out together," Prieto said. "I think when you compromise it makes it a better bill."

Senate President Steve Sweeney criticised the delay and said he tried unsuccessfully last summer to encourage the city to reorganise its finances.

"This was very, very unnecessary," Sweeney said. "We're coming up to Memorial Day. A very similar offer was made last July, and it was rejected."

Under the legislation, casinos would not be allowed to opt out of a payment in lieu of taxes plan, even if voters authorise casinos in northern New Jersey.

Atlantic City will get temporary loans of US$30 million for the remainder of this year; US$30 million to be applied to leftover 2015 debt, and another US$15 million for 2017. The city also would be able to get at least US$120 million each year from casinos under a payment-in-lieu-of-taxes bill that would last for 10 years.

It also could offer early retirement to its workers and retain its collective bargaining rights.

The impasse surrounded the harsher provisions of a Senate aid package that originally would have allowed the state to seize control of Atlantic City's finances and major decision-making powers in just over four months, including the right to unilaterally break union contracts.

The state still can wield that power, but only after its Community Affairs Department determines that the plan Atlantic City comes up with is not workable. The city would be able to appeal that determination to the courts before the state can take over.