Atlantic City Mayor Threatens Bankruptcy Amid State Takeover Talk

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TRENTON -- Atlantic City officials are threatening a bankruptcy filing as Gov. Chris Christie and top state lawmakers discuss a possible state takeover of the financially ailing Jersey Shore gambling resort.

Mayor Don Guardian said Wednesday that he will meet with the city council next week to consider asking the state to let the cityfile for bankruptcy.

"It would be good from a financial point for Atlantic City to file bankruptcy," Guardian said at the Statehouse after he and City Council President Marty Small met with state Assembly Speaker Vincent Prieto (D-Hudson) about the resort's troubles. "We'd come out with a clean slate."

"It's not good for the rest of the state," he added, noting that it might inspire more struggling municipalities to file.

Atlantic City takeover appears more likely after Christie rejects rescue bills

The announcement came a day after Christie once again rejected a package of rescue bills aimed to give a boost to Atlantic City -- even though they included changes that he asked the state Legislature to include.

The move left the city with a $33.5 million hole in its municipal budget, and officials say the resort could run out of money by April without the aid.

Small suggested Christie vetoed the package to push along legislation introduced by state Senate President Stephen Sweeney (D-Gloucester) for the state to assume control of the city's finances for 15 years.

"We feel it's extortion," Small said. "If this was on the other side, we'd be indicted. Gov. Christie has failed Atlantic City. Sen. Sweeney is failing Atlantic City."

Spokespeople for both Christie and Sweeney did not immediately return messages seeking comment Wednesday.

If Atlantic City did decide to seek bankruptcy, the state would need to approve the filing.

No New Jersey municipality has filed for bankruptcy since Fort Lee in 1932. Camden sought to file in 1990, but the state instead provided an emergency infusion of millions of dollars to the city.

Small suggested that threatening bankruptcy might inspire the state to give the city an infusion of money, as it did with Camden. That, he said, is preferable to a state takeover.

"Anything they do, we don't want a part of it," the council president said. "Just help us. Give us money like Atlantic City helped produce for the state."

An emergency manager appointed by Christie did not suggest bankruptcy in his final report released Friday. Instead, Kevin Lavin suggested massive cuts and for the city to regionalize or privatize government departments.

Sweeney has said the goal of the takeover would be to avoid bankruptcy.

"We cannot afford to let Atlantic City go bankrupt," Sweeney said in a statement Tuesday after Christie's vetoes.

Christie said this past weekend that he's met with Sweeney and Prieto about a possible takeover, but he has not said whether he would back it.

Prieto said he has not taken a position yet but he is "open to it."

"We need to help them," the speaker said Wednesday after the meeting with Guardian and Small. "We want to make sure why we do is good for the residents of the city."

Prieto added that "everybody wants to avoid bankruptcy."

"I think Donald Trump is the one who is good at it," he joked. "When you do that, your bond rating really goes down."

Prieto said he called Wednesday's meeting to make sure Atlantic City's leaders "have a seat at the table."

For decades, Atlantic City -- the only place in New Jersey where casino gambling is allowed -- was the economic engine of the southern part of the state.

But the resort saw four of its 12 casinos close over the last two years, taking more than 10,000 jobs with them, amid ever-growing competition from gambling halls in nearby states.

The city's casino revenue dropped from $5.2 billion in 2006 to $2.5 billion in 2015, and property-tax collections fell 64 percent over the last five years.

The state took over the resort's tourism district in 2010, and a state monitor began overseeing the city's finances the same year. In January, Christie hired the emergency manager.

But Sweeney has suggested the state hasn't done enough to correct its finances. Guardian argues that the city has worked closely with the monitor and emergency manager to shed millions from its budget.

Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01. Find NJ.com Politics on Facebook.