Gov. Christie calls for state takeover of Atlantic City

The State of New Jersey will take control of Atlantic City’s finances and governing, Gov. Christie announced Wednesday. The number of casino bus passengers traveling to the city fell 25.5 percent previous year through November, and the annual total is down about 65 percent since 2010.

Dan Solender, head of municipal debt at Lord Abbett & Co., pointed to the example of Detroit as showing how a takeover can lead to bondholder losses: it too fell under a state-appointed emergency manager, Kevyn Orr, who months later filed its record bankruptcy. Christie said he had hoped to avoid this step, but could not.

“We have to fix this government”, Sweeney said.

The plan would give the state more control over the city’s finances.

After months of negotiations, New Jersey lawmakers will allow the expansion of casinos in northern New Jersey, if voters need to approve the ballot measure in November. He tried online gambling. In 2014, four of its 12 casinos went out of business.

On Tuesday, Christie – taking a break from campaigning for the GOP presidential nomination – said that he and the state senate president, Democrat Steve Sweeney, had agreed on the outlines of a plan to take over numerous city’s functions.

Atlantic City’s budget woes have been exacerbated by the cratering of its casino industry.

The city council and mayor would remain in place, but – in Christie’s plan – the state would be able to dictate what they passed into law. Previous efforts haven’t included the type of “multi-pronged” solutions needed to address the city’s complex financial straits, he added.

Guardian, entering his third year in office, says his administration has cooperated with Christie in making painful budget cuts and is willing to do more. But he stood alongside Christie while Christie made the announcement on Tuesday.

“I’m sorry for [the takeover]”, Guardian told reporters on Tuesday. The increased involvement, which Mr. Christie declined to call an outright takeover, would expire after five years.

At the same time, the state legislature is considering another idea that could fundamentally change Atlantic City, by taking away its vital state-granted monopoly on gambling.

Read the Press of Atlantic City’s article here and the New York Times article here.