Jeffrey Chiesa Assumes Control of Atlantic City’s Finances, Seeks PILOT Deal with Casinos
Gov. Chris Christie recently appointed Jeffrey Chiesa to control Atlantic City’s finances for the next 5 years. Last week, Jeffrey Chiesa met with the City Council to discuss his plans for the future.
Mr. Chiesa has broad authority to make Atlantic City’s government sustainable. He has the authority to lay off workers, break contracts with the unions, and sell the city’s assets. He is supposed to be an outside, unsentimental force in reconstruction of the local government’s finances.
Jeffrey Chiesa’s Speech
The new financial boss gave a speech about the policies he plans to impliment. The new financial chief, who is a former US Senator and state attorney general for New Jersey, held his cards close to the vest. That method follows the style of Gov. Chris Christie in the issue, who has remained uncharacteristically tight-lipped on the plan.
In comments that were published in The Press of Atlantic City, Jeffrey Chiesa said, “My plan is to do what I think is necessary to create a structural financial situation that works not for six months, not for a year, but indefinitely so that this place can flourish in a way that it deserves to flourish.”
The lack of detail has led to wild speculation about what is coming for Atlantic City. Some believe the new financial controller is going to bring much-needed change, while others wonder is the newly-imposed outsider will make massive layoffs in the local bureaucracy.
Jim Murren on Atlantic City
For his part, MGM Resorts CEO Jim Murren, who has a stake in Atlantic City through the Borgata property, said Chiesa’s appearance is a good sign. Murren told the National Press Club recently, “Atlantic City’s darker days are behind it.”
Jim Murren’s speech were not simple words. MGM Resorts invested an additional $800 million to buy Boyd Gaming’s 50% interest in Borgata last summer. While Borgata is (by far) the most successful brick-and-mortar casino in Atlantic City, any property begins to lose value at a point, if the city around it is mismanaged.
MGM Resorts’ Investment in Borgata
Yet MGM Resorts decided to double-down on its investment in Borgata. Murren echoed many local residents’ thoughts when he said, “It’s heartbreaking what has happened in Atlantic City,” then added, “I would not have just invested additionally another $800 million into Atlantic City if I did not believe that it could move forward.
Plans PILOT Deal with Casinos
Chiesa did give some indication what his first moves would be. He said one of his top priorities is to reach an agreement with Atlantic City casino on making payments in lieu of property taxes (PILOT).
The new financial executive also gave indication he would adapt to the circumstances. Chiesa said, “What this designation has done is consolidate authority, per the legislation, in the designee to make those decisions. That does not mean that I’m not listening. That does not mean I’m pretending I have all the answers without consulting with other people.”
Long Term Outlook for Chiesa in Atlantic City
The question is whether Jeffrey Chiesa is going to have the 5 years that Chris Christie has suggested he should have. 2017 marks the end of Gov. Chris Christie’s administration in New Jersey. Because of mandatory term limits, New Jersey will have a new governor in 2018.
New Jersey tends to lean to the liberal side, though Chris Chistie is a Republican. Given the corruption and economic problems New Jersey has faced under Gov. Christie, the next election might well favor the Democrats’ candidate. If so, then Jeffrey Chiesa might see his control of Atlantic City’s finances undermined or reversed by the new governor.
If a week is an eternity in politics, then a year in politics is likely to bring many events, and thus changes in the New Jersey electorate. Republicans tend to run better off-year campaigns, but the mood among Democrats might be outraged and activist by the end of 2017. With only a handful of ballot initiatives, Democrats might load up to take back the New Jersey governship. But in recent years, the GOP has proven more effective as a political organization, so the Republicans might win and install Chris Christie’s successor.
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