Atlantic City casinos pay a 1.25 percent tax (IAT) on gambling revenue to finance projects that the CRDA deems economically and socially worthwhile. Since 2011, the IAT, Investment Alternative Tax , was tweaked to primarily assist AC projects. No longer would these casino taxes be used for myriad projects thru-out the state of NJ.
CRDA Mission – Casino Reinvestment Development Authority provides investment funds for economic development and community projects in Atlantic City. It shall encourage business development, permanent job creation, business expansion.
Did these CRDA / IAT funded projects benefit the citizens of Atlantic City and the local economy as a whole? Or did it just benefit the casinos? How many LOCAL AC residents do these casinos employ full-time?
IN 2012, CRDA ramped up spending. Tens of millions of IAT dollars went to casino upgrades, not on rebuilding the neighborhoods & infrastructure of Atlantic City.
- BORGATA. The CRDA approved $15 million in IAT Investment Alternative Tax dollars to help Borgata with past projects like Festival Park and Premier Nightclub. $15 million for a Borgata nightclub expansion in 2015. The Borgata project included an outdoor stage which only lasted a year. It was replaced with a beer garden. Borgata is market-valued at 1.9 billion, but will only pay taxes based on $850 mil assessment….for next 10 years. ( thx to PILOT bill )
- GOLDEN NUGGET. Casino Reinvestment Development Authority gave the go-ahead to the Golden Nugget Atlantic City to create ‘villas’ from an old restaurant on the property, each with a bedroom, living room, entertainment space, dining area and bar. The $4.5 million project is being funded with $1.2 million in Investment Alternative Tax obligations, with more to come from projected IAT revenue.
- HARRAH’S. Mega conference center. CRDA spent $46 million for Harrah’s Waterfront Conference Center in 2012. To help fund the project, the Casino Reinvestment Development Agency fronted millions of Resorts’ reinvestment credits with the agency. Resorts could later request reimbursement of future reinvestment payments to the CRDA.
- TROPICANA. Health and fitness center, update of 434 hotel rooms, light-and-sound show. The Casino Reinvestment Development Authority approved $18.8 million toward the Trop’s projects.
To be sure…. IAT dollars can do a lot of good for Atlantic city. When allocated appropriately, these dollars can boost local jobs for locals….grow tourism, marketing and the overall economic well-being of Atlantic City.
New Jersey Policy Perspective reports that “the casino industry — not Atlantic City — became a major beneficiary of CRDA’s investments.”
A few examples of prudent CRDA investing: Tanger Outlets, Bass Pro Shops and Stockton University, street paving, Steel Pier, Miss America and beach concerts. While all of these projects have merit, some argue that specific investment in Steel Pier & Miss America is questionable. Our take: Steel Pier & Miss A are iconic, heritage attractions that still have promising upsides if properly managed and maintained.
A few CRDA / IAT investments have been called out for having weak, or very disappointing results: Atlantic City Alliance and summer beach concerts.