Atlantic City seeks $100M from airport sale to water utility
Sep 27 2016 by Larry Hoffman
This post will be updated.
"We always talked about monetizing the MUA", Atlantic City Mayor Don Guardian said at the press conference.
According to Guardian, any proceeds of the sale would be collateral for the $73 million the state gave the city over the summer which required that the city dissolve the MUA by October 3, WCBS 880's Kelly Waldron reported.
With the state of New Jersey at its gates, threatening to declare them in default of the terms of a $73 million state loan, Atlantic City was promising a "major announcement" regarding the future of its Municipal Utility Authority.
"If you're for Atlantic City, and you're for the people, the people made it crystal clear they wanted the water utility to remain in public hands, and it's in public hands", Small said.
With the state last week declaring the city in violation of the terms of the loan - and giving them until October 3 to remedy the breach - Guardian, City Council President Marty Small, ACMUA executive director Bruce Ward and MUA Board members are due at 11 a.m. Monday at the Virginia Avenue authority to present their plan for the future. "It makes absolutely no sense, other than vengeance, to stop this deal".
The MUA would have to borrow to buy Bader Field, the defunct former airstrip owned by the city, saddling it with debt that would effectively be a poison pill for potential private buyers, Guardian said in a phone interview. But Guardian insists there is more than enough money in diverted casino marketing funds ($60 million) and casino reinvestment taxes (nearly $20 million) to cover the payment that's due next week.
The much-needed cash from the water utility could help the beleaguered seaside resort city balance its 2017 budget, which was a requirement the state set when it issued a $73 million emergency loan earlier this year.
Water authority director Bruce Ward praised the plan as the "most minimally invasive measure" to accomplish the "root canal" that Atlantic City needs.
In the meantime, the city is prepared to wait until the real estate market improves and the land is worth more than it is now.
Bader Field, which closed to air traffic in 2006, was put up for auction in August, but only received two bids of $50 million.